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AirAsia Records Record Quarterly Loss

Published on Mar 30 2021 1:42 PM in General Industry tagged: AirAsia

AirAsia Records Record Quarterly Loss

Malaysia's budget airline AirAsia Group Bhd has recorded a record quarterly loss, as depreciation and impairments deepened the impact of lockdowns, but it said that it is confident of a full recovery in two years' time.

Net loss in the October-December period widened to 2.44 billion ringgit ($590.72 million) versus 384.4 million ringgit a year earlier, overtaking the 1.33 billion ringgit loss estimated in a Refinitiv poll.

Revenue fell by 92% to 267.4 million ringgit as capacity shrank by 88% compared to a year ago, mainly because of lower capacity in Malaysia, the Philippines and Indonesia, as international borders remained closed, it said in stock exchange filing.

"A major portion of the loss for the period relates to depreciation of [right-of-use assets] and interest on lease liabilities amounting to 654.2 million ringgit," the airline said.

It also recorded a jump in impairment of receivables from affiliate AirAsia X Bhd due to its restructuring, and AirAsia Japan, which has started bankruptcy proceedings.

The quarter's financial performance factored in one-off adjustments of impairments, fuel swap losses and the bankruptcy costs for AirAsia Japan, which it shuttered in October.

Lease liabilities were 12.7 billion ringgit as of December 31, 2020, including deferred aircraft leases of approximately 1.5 billion ringgit, it said.

AirAsia's borrowings as of December 31, 2020, almost tripled to 1.28 billion ringgit from 428.9 million ringgit a year ago, mostly from deferred fuel hedge settlements.

AirAsia Group reported a 90% fall in passengers compared to a year ago, resulting in load factor, a measure of how full planes are, dropping 15 percentage points to 67%.

Group chief executive Tony Fernandes in a separate statement said that the airline hopes for a full recovery in the next two years. He is also "very optimistic" that international air travel will resume in the second half of this year as vaccination and testing accelerate.

Looking To Raise 2.5 Billion Riggit

AirAsia has been looking to raise up to 2.5 billion ringgit to weather the pandemic, and said at the weekend that it expects to secure one billion ringgit in loans from Malaysian banks.

News by Reuters, edited by Hospitality Ireland. Click subscribe to sign up for the Hospitality Ireland print edition.

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