Malaysia’s AirAsia X posts record quarterly loss of $5.9b

AirAsia deputy group CEO Aireen Omar said the airline is ready to take on industry giants Expedia and Booking.com with its own online travel business. Photo: Nikkei Asian Review

Malaysia’s AirAsia X Bhd on Monday posted a record quarterly loss of $5.9 billion, eight times more than a year ago, as a multi-billion-dollar provision to cover debts drove operating costs higher.

It was the ninth loss in succession for the airline, an affiliate of AirAsia Group Bhd.

The net loss for the April-June period widened to 24.6 billion ringgit ($5.88 billion), from a 305.2 million ringgit loss a year ago.

The airline said it made an accounting provision of 23.8 billion ringgit to its creditors during the quarter as it is in default under the contract terms.

Revenue dropped 20.9% to 72.3 million ringgit, versus 91.4 million ringgit.

In a stock exchange filing, it said the impact of the provision should be temporary.

“The contractual liabilities for which the provision is made will be waived upon a successful completion of the proposed debt restructuring exercise,” it said.

To reduce costs, the airline group plans to operate a reduced fleet and return excess aircraft to the lessors. It said it has returned one aircraft and is in discussions with other aircraft lessors “to achieve the optimal fleet size”.

Discussions to reduce future lease rental rates are ongoing, as are talks with other service providers to reduce maintenance costs.

The airline, which is looking to convene meetings with creditors to propose a restructuring scheme by the end of October, proposed last October to restructure its 64.15 billion ringgit debt into a principal amount of 200 million ringgit.

It said it is making good progress in negotiations.

The implementation of a fund-raising exercise involving a rights issue and a share subscription for new investors to raise 500 million ringgit, will start provided the upcoming creditors’ meeting approves it, it said.

AirAsia X also plans to apply for a government guaranteed loan of up to 500 million ringgit, it said.

The group at the end of last year changed its financial year end from Dec. 31 last year to June 30 this year.

Reuters

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.