Wednesday, November 21, 2018

AirAsia X widens net loss in 3Q on higher fuel, operating costs

AirAsia X Group, the long-haul arm of LCC AirAsia, recorded a net loss of MYR197.5 million ($47.7 million), deepened from MYR43.4 million loss in the year-ago quarter, as operating costs continue to increase. The carrier had reported MYR99.3 million loss in the previous quarter.

The airline cited rising fuel costs as the main contributor to rising operating costs, saying the average fuel price per barrel rose from $65 in 3Q17 to $91.

Cost, measured as cost per available seat kilometer (CASK), increased 12% year-over-year (YOY). In addition, doubtful debts provided for subsidiary AirAsia X Indonesia contributed to the negative quarterly performance.

Third-quarter revenue fell 4% YOY to MYR1 billion from MYR1.1 billion because of a 5% drop in average base fare as part of a plan to increase capacity on established routes and introduce new ones.

ASKs decreased 4% YOY after capacity was redeployed to the North Asia region. Revenue per ASK (RASK) dipped 1% YOY, but was up 4% compared to the previous quarter because of improvements in China routes.

“Our average fares have increased by 13% from 2Q18 and we expect to reap further rewards once these routes mature,” AirAsia X Group CEO Nadda Buranasiri said. “While we expect that the provision of doubtful debts will place short-term pressures on the full-year earnings, we remain confident on the ongoing efforts to boost our ancillary revenue, passenger growth and yields in the longer term.”

He said the company is studying the sustainability of AirAsia X Indonesia, which will cease its last scheduled service from Bali to Tokyo-Narita in January 2019 and operate as a non-scheduled airline.

As part of cost-cutting measures, Buranasiri said the group is in advanced negotiations with aircraft lessors to lower lease rates and business partners to reduce ground handling rates at its foreign stations.

(Chen Chuanren - ATWOnline News)

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