AirAsia remains in the red due to forex losses


BUDGET carrier AirAsia Group Bhd has remained in the red for the second successive quarter this year with a third quarter loss of RM51.44 million, due to foreign exchange (forex) volatility for the period amounting to RM206.3 million.

AirAsia said in a statement that the decline was also attributed to fair value loss on derivatives and net off against gain on disposal of property, plant and equipment for RM92.1 million.

This was partially offset by a one-time gain from disposal of its investment in an associate for RM170.8 million.

Revenue for the quarter, however, increased by over 17% to RM3.07 billion from RM2.61 billion the year prior on two million additional total passengers carried for the three months ended Sept 30, 2019 (3Q19), and a slight increase in revenue per available seat kilometre to 15.02 sen from 14.83 sen.

The airline’s capacity grew by 10% each in Malaysia and India for the quarter, with the Philippines recording the highest capacity growth at 19%.

This helped increase unit passenger revenue for AirAsia India Ltd (AAI) and Philippines AirAsia Inc (PAA) by 1% and 3% respectively, although its Malaysia operations showed a 5% decline.

Cost per available seat kilometre ex-fuel also rose to 9.63 sen in 3Q19 from 8.05 sen in 3Q18.

This was mainly due to higher staff costs, provisions for maintenance and overhaul, user charges and other related expenses over increased operations and the impact of adopting the Malaysian Financial Reporting Standards 16 Leases.

The group’s cash inflow from operations rose to RM2.42 billion against inflow of RM1.63 billion in the same period last year. Improved investment activities were mainly from the completion of disposal of aircrafts while the increase in outflow from financing activities was a result of repayment of borrowings and payment of dividends to shareholders.

Its associate companies, Thai Air Asia Co Ltd and AAI had both widened their losses, while AirAsia Japan Co Ltd reported a loss of ¥3.71 billion (RM140 million). The group’s equity in AirAsia Japan is 66.9%.

AirAsia expects its airline business, load factors and fares to remain strong for the remaining of the year.

Its first A321neo received earlier this month will be operated on populous routes across Asia including Singapore, Bangkok and Shenzhen.

The regional carrier has also hedged 86% of its fuel requirement for the final quarter of this year at average Brent hedge prices of US$60.72 (RM253.33) per barrel.

For the year forward, AirAsia has hedged 73% of its requirement in 2020 at an average Brent hedge prices of US$60.22 per barrel.