PETALING JAYA: AirAsia X Bhd’s (AAX) net loss for the second quarter ended June 30, 2019 widened to RM207.11 million from RM57.46 million a year ago, mainly due to loss of disposal of three aircraft under sale and leaseback during the current quarter and weakening of the ringgit against the US dollar.
Its revenue fell 4.46% to RM1.01 billion versus RM1.06 billion previously.
For the six-month period, the long-haul low-cost carrier’s net loss also widened to RM163.78 million from RM15.96 million, while revenue dropped 6.45% to RM2.18 billion from RM2.33 billion in the previous year.
AAX said it recognises the challenges posed by the weakening of ringgit against the US dollar. The company will continue to drive revenue and sale of ancillary services to mitigate higher operational cost. Demand and load factors are expected to remain at a reasonably healthy level.
“However, it is worthwhile to note that average base fare is under pressure due to the increase in capacity on core established routes, in addition to new routes,“ it said.
AAX also noted it is aware of the slowdown of growth in tourism sector, especially coming from the China and Korea market segments. Efforts have been made to mitigate this risk by shifting some of future capacity into other core markets.
On the fleet planning front, while AAX Thailand is adding up to five aircraft through operating leases in 2019, AAX Malaysia is expected to remain with 24 aircraft as it focuses on maximising aircraft utilisation and realigning business model to ensure continued sustainability and commercial viability in the coming quarters.
“Going into the second half of 2019, the company foresees operational environment to remain challenging against global economy backdrop and pressure on the ringgit.”
Meanwhile, AAX is concerned on the implementation of departure levy with effective from Sept 1, which may potentially impact the demand for air travel especially when the third quarter is usually the leaner quarter for mid-to-long haul segment.
The group, however, expects Q4 2019 to remain reasonably healthy as the management continues to push for efforts to mitigate cost pressures and remains committed to ensure sustainable growth amid these challenging circumstances.
Source: The Sun Daily