Losses in Indonesia drag down AirAsia revenue

KUALA LUMPUR, Malaysia – Malaysia-based AirAsia, the region’s biggest budget carrier by fleet size, said Thursday, November 26 it suffered a loss in the third quarter, bogged down by foreign exchange losses and its Indonesian operations.

AirAsia registered a net loss of 405.72 million ringgit ($95.9 million) in the quarter ending September 30. 

The company had registered a profit of 5.4 million ringgit in the corresponding period of 2014.

Revenue increased by 15% to 1.52 billion ringgit due to an increase in passenger numbers, fuelled in particular by increased demand from Chinese travelers, AirAsia said.

The discount carrier, in a statement, added that foreign exchange losses were 435.98 million ringgit, up from 152.66 million ringgit a year ago.

AirAsia’s flamboyant boss Tony Fernandes, a former record industry executive, remained optimistic for the rest of the year, insisting that in Malaysia, all signs were “pointing towards rational and sustainable growth in the coming quarters.”

The company’s Indonesian operations, Indonesia AirAsia, (IAA) took a hit with a drop in passengers and revenue fell by 14% to 1,483.7 billion rupiah.

“IAA’s turnaround plan was solid but was affected by new regulations,” Fernandes said.

“Demand during the quarter was affected due to the negative equity regulation introduced which was widely covered by both local and international media. This created uncertainty and prompted travel agents to divert bookings away from IAA.”

Meanwhile, the company’s long haul arm AirAsia X posted on Wednesday a third quarter net loss of 288.19 million ringgit.

During the same period last year it suffered a net loss of 210.85 million ringgit. – Rappler.com