AirAsia X net loss widens on fewer flights

Ancillary revenue: AirAsia X aircraft operating lease income is boosted by additional aircraft subleased to Thai AirAsia and Indonesia AirAsia.

PETALING JAYA: AirAsia X Bhd (AAX) extended its net loss to RM132.94mil during the second quarter ended June 30, from a net loss of RM128.79mil a year earlier.

The long-haul associate of AirAsia Bhd also posted a 2.7% dip in revenue to RM653.03mil against RM671.61mil in the same quarter last year.

In its filing with Bursa Malaysia, AAX said the decrease was mainly due to lower schedule flights including fuel surcharges as a result of lower passengers flown. However, despite load factor falling to 12%, average passenger fare improved by 7.2% to RM415.91 during the quarter.

Charter revenue grew to RM119.3mil from RM85.7mil in the previous corresponding quarter on more charter contracts secured.

Ancillary revenue including AirAsia Insure fell 24.3% to RM106.6mil against RM140.7mil last year due mainly to the lower number of passengers flown.

Meanwhile, aircraft operating lease income increased to RM65.4mil from RM17mil in the second quarter of 2014 due to additional aircraft sub-leased to Thai AirAsia X Co Ltd (TAAX) and PT Indonesia AirAsia Extra (IAAX).

Revenue per available seat kilometre (RASK) during the quarter increased 6.7% to 11.51 sen, compared with 10.79 sen previously.

AAX’s other operating expenses fell 56% to RM30.4mil due to the recognition of unrealised foreign exchange gain in operations from the weaker ringgit.

For the first half, AAX almost doubled its net loss to RM258.86mil from RM140.1mil previously. Revenue was slightly higher at RM1.428bil against RM1.421bil in the year before.

RASK increased by 7% to 12.24 sen during the first half.

For the first half, scheduled flights including fuel surcharges, fell 11.6% to RM794mil due mainly to lower passengers flown. However, average passenger fare increased by 7.8% to RM462.29 for the six months.

Charter revenue increased to RM232.7mil on more charter contracts secured. Meanwhile, ancillary revenue including AirAsia Insure, decreased 19.3% to RM234.6mil due to the lower number of passengers flown.

Aircraft operating lease income was higher at RM112.5mil due to additional aircraft being sub-leased to TAAX and IAAX.

The group’s operating expenses decreased 3.7% to RM1.534bil on lower aircraft fuel expenses, and other operating expenses. However, maintenance, overhaul, user charges and other related expenses; and aircraft operating lease expenses increased during the six-month period.

Moving forward, AAX said advance bookings indicated that recovery in passenger and yields evident in the second quarter quarter would hold up for the rest of 2015. It expects average fares to be higher on resumption of marketing activities and better price discipline.

“The company remains on track with its turnaround plan with a focus on optimising fleet size and improve yields and loads,” it said. AAX added that the severe weakening of ringgit would adversely impact its financial performance.

It believes it has taken the necessary steps to rationalise its operations and improve financial performance, taking into account its recently completed rights issue with warrants exercise.

Meanwhile, India’s Tata Group has increased its stake in AirAsia India to 41% from 30% previously. AirAsia also announced US$160mil (RM656.4mil) in cost savings from weakening crude oil prices, was expected next year.

Following this, shares in AirAsia hit a high of RM1.13 and was one of the top 10 most active stocks traded on Bursa yesterday. It closed the day 2 sen lower to RM1.07 with 35.5 million shares done.