The ASP will continue to normalise in the 1Q for the next calendar year and it will be higher, says CEO

by HARIZAH KAMEL / Pic by TMR FILE PIX

AIRASIA Group Bhd expects to have sufficient liquidity for the second half of the financial year 2021 (2H21) and throughout 2022 via all of its strategic fundraising exercises.

The low-cost carrier narrowed its net loss to RM580.06 million for the second quarter ended June 30, 2021 (2Q21), from a net loss of RM992.89 million in 2Q20.

Revenue for the quarter was RM370.61 million, higher by 160.82% year-on-year (YoY) following improved revenue from its aviation and digital businesses.

In a bourse filing yesterday, AirAsia noted aviation revenue increased 176% YoY off a low base due to the fleet hibernation for most of 2Q20 caused by the onset of the pandemic.

Although aviation revenue was much higher, active capacity management and concentration on flying the most profitable routes as well as lease restructuring, asset optimisation and targeted cost control resulted in a 54% reduction in aviation operating expenses YoY.

The absence of fuel swap loss for the quarter also contributed to better performance.

Its growing digital businesses reported stronger revenue, up 147% YoY led by contributions from Teleport, which tripled its revenue YoY driven by a higher number of cargo-only flights and delivery demand volume through scheduled cargo networks connecting India, China, Korean and Japan through Asean.

The AirAsia Super App reported revenue growth of 39% YoY attributed to new product offerings and commissions while BigPay posted significant growth in revenue, up 56%

YoY driven by payments and remittances. On the group’s outlook, group CEO Tan Sri Tony Fernandes (picture) stated it continues to evaluate funding, potential monetisation and other corporate exercises to ensure sufficient liquidity.

“By the end of 3Q21, we will have completed two batches of lease restructuring and expect to complete the full exercise by the end of 2021,” he said.

Fernandes added the group’s transformation is over and it is now an investment holding company with a portfolio of synergistic travel and lifestyle businesses that leverage data and technology to deliver the best value at the lowest cost, supported by strong data and one of Asia’s leading brands that remains committed to serving the underserved.

“Innovation has always been in our DNA and we will continue to develop and expand our products and services to meet consumer demand in all of our key markets,” he added.

In Malaysia, travel demand remains constrained due to the lockdown and interstate travel restrictions imposed since January 2021. However, through stringent capacity management, AirAsia Malaysia reported a load factor of 64% in 2Q21.

AirAsia Indonesia achieved 70% of preCovid domestic capacity in May 2021.

However, this was short-lived as it entered hibernation mode in July 2021 in support of containment efforts by the government as the number of infection cases increased.

AirAsia Philippines saw a strong rebound that continues into 2Q21 with a load factor of 78%, achieving a high load factor of 83% in June 2021.

“With travel restrictions still in place in most of our operating entities, the group continues to actively manage capacity and will continue to ensure cash burn remains low and cost optimisation measures continue to be implemented,” said AirAsia Group in a bourse filing.