Malaysia’s AirAsia posts record quarterly loss of $591m in December quarter

Photo: Reuters

Malaysia’s budget airline AirAsia Group Bhd reported a record quarterly loss on Monday, as depreciation and impairments deepened the impact of lockdowns, but said it was 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 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 Dec. 31, including deferred aircraft leases of approximately 1.5 billion ringgit, it said.

AirAsia‘s borrowings as of Dec. 31 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 the airline hoped for a full recovery in the next two years. He was also “very optimistic” international air travel would resume in the second half of this year as vaccination and testing accelerate.

AirAsia has been looking to raise up to 2.5 billion ringgit to weather the pandemic, and said at the weekend it expects to secure 1 billion ringgit in loans from Malaysian banks.

Reuters

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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).

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  • 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.