AirAsia Group Bhd flipped to a net loss in the fourth quarter, its first quarterly loss in more than three years, as higher fuel prices and operating lease costs dented income.
To boost revenue, the chief executive of Asia's largest budget carrier said the group would step up efforts to sell more travel services on its website when customers booked flights.
AirAsia posted a bigger than expected loss of 395 million ringgit ($97 million) for the period, versus a 372.6 million ringgit profit a year earlier. Refinitiv data showed one analyst had forecast a 63.2 million ringgit loss.
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Malaysia's flagship budget carrier said in a stock exchange filing that fuel consumption rose 12% and its average price climbed 33% to $92 a barrel in the three months to the end of December 31, 2018. Fuel costs rose 48% to 1.1 billion ringgit.
Operating lease expenses rose 115% to 413.4 million ringgit, after AirAsiasold and leased back aircraft.
Revenue grew 6.2% to 2.82 billion ringgit, as total passengers carried by the airline swelled 16% to 12.1 million, although this trailed a 21% capacity increase.
The passenger load factor for the period, a measure of how full planes are, fell 4 percentage points to 84%.
The airline said the rise in fuel costs had a major impact, saying it had hedged 52% of its 2019 needs at $63.41 a barrel for Brent.
AirAsia said it was seeking to reduce costs with new technology and said it also expected airport expenses to fall.
Aiming To Offer More Hotel Bookings, Tours And Insurance
CEO Tony Fernandes said the group aimed to offer more hotel bookings, tours and insurance via the airline's website.
"We believe that this platform has enormous potential and will generate a significant increase in revenue for the group," he said in a statement.
AirAsia signed a memorandum of cooperation in December with Vietnamese partners to set up a lowcost carrier.
Fernandes said this was the "last piece" in its network of joint ventures that aim to connect passengers to north Asian nations such as China, Korea and Japan.