AirAsia posts record loss in first quarter


AirAsia Group on July 6 reported a first-quarter loss of $187.91 million, down from a net profit of $22.5 million in the same quarter of the previous year, blaming a collapse in air travel demand resulting from the coronavirus pandemic, as well as losses on a fuel hedges settlement, Reuters reported.

Revenue was 15 per cent lower at $541 million. This was the budget carrier’s biggest first-quarter loss since it listed on the Malaysian bourse in November 2004.

Passengers carried during the quarter fell 22 per cent to 9.85 million, while the passenger load factor – a measure of how full planes are – dropped 11 basis points to 77 per cent. The group further said that fair value losses on derivatives, as well as additional depreciation and interest on operating lease aircraft had also impacted earnings.

AirAsia said demand had been positive since the carrier gradually restarted domestic routes after grounding most of its fleet in March due to movement restrictions to contain the coronavirus.

Increasing frequency to half the pre-pandemic level

“We are aiming to increase our flight frequencies to around 50 per cent of our pre-Covid 19 operations and we look forward to resuming all domestic routes in the coming weeks and months,” Bo Lingam, president for the group’s airlines business, noted.

Group CEO Tony Fernandes said the company had sought payment deferrals from suppliers and lenders to ensure sufficient working capital.

“We have also restructured a major portion of the fuel hedges with our supportive counterparties and are still in the process of restructuring the remaining exposure,” Fernandes said.

The group said the initiatives so far are expected to result in at least a 30-per cent cost reduction year-on-year in 2020, and it is hopeful of further cost reductions. The airline also has received proposals from investment bankers, lenders and potential investors to help it cope with the coronavirus crisis.



Support ASEAN news

Investvine has been a consistent voice in ASEAN news for more than a decade. From breaking news to exclusive interviews with key ASEAN leaders, we have brought you factual and engaging reports – the stories that matter, free of charge.

Like many news organisations, we are striving to survive in an age of reduced advertising and biased journalism. Our mission is to rise above today’s challenges and chart tomorrow’s world with clear, dependable reporting.

Support us now with a donation of your choosing. Your contribution will help us shine a light on important ASEAN stories, reach more people and lift the manifold voices of this dynamic, influential region.

$
Personal Info

Donation Total: $10.00

 

 

AirAsia Group on July 6 reported a first-quarter loss of $187.91 million, down from a net profit of $22.5 million in the same quarter of the previous year, blaming a collapse in air travel demand resulting from the coronavirus pandemic, as well as losses on a fuel hedges settlement, Reuters reported. Revenue was 15 per cent lower at $541 million. This was the budget carrier’s biggest first-quarter loss since it listed on the Malaysian bourse in November 2004. Passengers carried during the quarter fell 22 per cent to 9.85 million, while the passenger load factor - a measure of how...


AirAsia Group on July 6 reported a first-quarter loss of $187.91 million, down from a net profit of $22.5 million in the same quarter of the previous year, blaming a collapse in air travel demand resulting from the coronavirus pandemic, as well as losses on a fuel hedges settlement, Reuters reported.

Revenue was 15 per cent lower at $541 million. This was the budget carrier’s biggest first-quarter loss since it listed on the Malaysian bourse in November 2004.

Passengers carried during the quarter fell 22 per cent to 9.85 million, while the passenger load factor – a measure of how full planes are – dropped 11 basis points to 77 per cent. The group further said that fair value losses on derivatives, as well as additional depreciation and interest on operating lease aircraft had also impacted earnings.

AirAsia said demand had been positive since the carrier gradually restarted domestic routes after grounding most of its fleet in March due to movement restrictions to contain the coronavirus.

Increasing frequency to half the pre-pandemic level

“We are aiming to increase our flight frequencies to around 50 per cent of our pre-Covid 19 operations and we look forward to resuming all domestic routes in the coming weeks and months,” Bo Lingam, president for the group’s airlines business, noted.

Group CEO Tony Fernandes said the company had sought payment deferrals from suppliers and lenders to ensure sufficient working capital.

“We have also restructured a major portion of the fuel hedges with our supportive counterparties and are still in the process of restructuring the remaining exposure,” Fernandes said.

The group said the initiatives so far are expected to result in at least a 30-per cent cost reduction year-on-year in 2020, and it is hopeful of further cost reductions. The airline also has received proposals from investment bankers, lenders and potential investors to help it cope with the coronavirus crisis.



Support ASEAN news

Investvine has been a consistent voice in ASEAN news for more than a decade. From breaking news to exclusive interviews with key ASEAN leaders, we have brought you factual and engaging reports – the stories that matter, free of charge.

Like many news organisations, we are striving to survive in an age of reduced advertising and biased journalism. Our mission is to rise above today’s challenges and chart tomorrow’s world with clear, dependable reporting.

Support us now with a donation of your choosing. Your contribution will help us shine a light on important ASEAN stories, reach more people and lift the manifold voices of this dynamic, influential region.

$
Personal Info

Donation Total: $10.00

 

 

NO COMMENTS

Leave a Reply