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Malaysia’s AirAsia posts record quarterly loss

Reuters

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Malaysia’s AirAsia posts record quarterly loss

AIRASIA. AirAsia planes are seen parked at Kuala Lumpur International Airport in Sepang, Malaysia, October 6, 2020.

Photo by Lim Huey Teng/Reuters

AirAsia Group's net loss widens to 2.44 billion ringgit ($590.72 million) in October-December 2020. It cites lower capacity in Malaysia, the Philippines, and Indonesia.

Malaysia’s budget airline AirAsia Group Bhd reported a record quarterly loss on Monday, March 29, 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 a 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 December 31, including deferred aircraft leases of approximately 1.5 billion ringgit, it said.

AirAsia’s borrowings as of December 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. – Rappler.com

$1 = 4.1390 ringgit

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