AirAsia posts record quarterly loss amid turbulence from virus

But budget airline is confident of a full recovery in two years' time

AirAsia Group reported a 90 per cent 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 per cent. ST PHOTO: BENJAMIN SEETOR
AirAsia Group reported a 90 per cent 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 per cent. ST PHOTO: BENJAMIN SEETOR

KUALA LUMPUR • Malaysia's budget airline AirAsia Group has reported a record quarterly loss, 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 RM2.44 billion (S$794.3 million) versus RM384.4 million a year earlier, overtaking the RM1.33 billion loss estimated in a Refinitiv poll.

Revenue fell 92 per cent to RM267.4 million as capacity shrank by 88 per cent 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 RM654.2 million," the airline said in a statement on Monday.

It also recorded a jump in impairment of receivables from affiliate AirAsia X 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 RM12.7 billion as of Dec 31, including deferred aircraft leases of approximately RM1.5 billion, it said.

AirAsia's borrowings as of Dec 31 almost tripled to RM1.28 billion from RM428.9 million a year ago, mostly from deferred fuel hedge settlements.

AirAsia Group reported a 90 per cent 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 per cent.

Group CEO Tony Fernandes, in a separate statement, said the airline hoped for a full recovery in the next two years. He was also "very optimistic" that 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 RM2.5 billion to weather the coronavirus pandemic, and said at the weekend that it expects to secure RM1 billion in loans from Malaysian banks.

REUTERS

A version of this article appeared in the print edition of The Straits Times on March 31, 2021, with the headline 'AirAsia posts record quarterly loss amid turbulence from virus'. Subscribe