AirAsia X (AAX) has recently been added to the FTSE4Good Bursa Malaysia (F4GBM) Index roster, following a significant improvement in its sustainability evaluations as per the latest assessments by the stock exchange and global rating agencies in December 2024.

The carrier’s FTSE Environmental, Social, and Governance (ESG) score dramatically increased to 3.5, up from 2.1 in 2023. This rise was attributed to thorough reporting on its sustainability initiatives, which are part of the ongoing deal to acquire Capital A’s aviation enterprises, AirAsia Aviation Group Limited and AirAsia Berhad.

AirAsia X CEO, Benyamin Ismail said: “We have recorded tangible progress in progressing AAX’s ESG journey by implementing real, measurable actions that drive long-term resilience and value creation. From carbon reduction measures through fuel efficiency and operational improvements to reducing waste and integrating sustainability into our risk management framework, we are taking a pragmatic, data-driven approach to our ESG journey to ensure lasting impact.”

“The appointment of sustainability advisers across the brand has strengthened our understanding of ESG risks and opportunities, ensuring these considerations are fully integrated into our decision-making processes. As we progress towards the acquisition of Capital A’s aviation businesses, aligning AAX’s sustainability efforts with Capital A’s sustainability roadmap reinforces governance, transparency, and long-term resilience, supporting our commitment to scaling operations sustainably.”

These ESG evaluations reflect the airline’s performance in 2023. AAX has consistently enhanced its commitment to sustainability, demonstrated by notable advancements in its ESG practices last year. In 2023, the airline reported a 32% decrease in carbon intensity per seat kilometer and reduced its CO₂ emissions by 5,395 tonnes due to better fuel efficiency. Moreover, the establishment of its Sustainability Steering Committee and the integration of ESG principles into its Enterprise Risk Management framework have strengthened governance and proactive risk management.

AAX has also made significant strides in Diversity, Equity, and Inclusion (DEI), with 48% of its workforce being women, 37% of its leadership team, 22% in management roles, and 17% on its Board of Directors. The airline also undertook its inaugural gender pay gap analysis to pinpoint improvement opportunities and committed to fair pay strategies over the long haul.

As AAX enters its 2024 reporting period, it anticipates showcasing further sustainability achievements in areas such as fuel efficiency, waste management, and enhancing passenger experiences. Committed to its sustainable development goals, the airline is exploring strategies for a low-carbon future, including updating its fleet and investigating Sustainable Aviation Fuels (SAF).

*FTSE Russell’s ESG Ratings employ a uniform global methodology to evaluate firms and assign ratings for inclusion in FTSE4Good indices. To be considered, companies must meet a minimum rating of 2.9 in emerging markets or 3.3 in developed markets, along with fulfilling financial requirements specified by their respective exchanges.

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