AirAsia narrow losses in Q2, sees V-shaped resumption in air travel demand


CEO Tan Sri Tony Fernandes says the group's transformation is over and AirAsia Group is now an investment holding company. - YAP CHEE HONG/THESTAR

KUALA LUMPUR: AirAsia Group Bhd said revenue climbed on the second quarter ended June 30, coming from a low base last year and boosted by the jump in contribution from its expanding digital and lifestyle businesses.

CEO Tan Sri Tony Fernandes, in a statement today. said the second quarter marked the end of the group's transformation process in becoming an investment holding firm.

For the three-month period, AirAsia Group's net loss narrowed to RM580mil from RM993mil made a year ago.

Revenue was up at RM370mil compared with RM142mil previously.

Easing travel restrictions across the region and rising vaccination rates are positive development for the group with core airline operations projected to show gradual pick up in domestic operations in the fourth quarter.

"With the accelerated vaccine rollouts across Asean, we expect to see more vaccinated travel lanes and vaccine bubbles forming which will boost a V shaped resumption of air travel in the near future," its airlines president Bo Lingam said.

Aviation revenue declined 8% quarter-on-quarter (QoQ) but increased 176% year-on-year (YoY) off a low base due to the fleet hibernation for the most part of 2Q2020 caused by the onset of the pandemic.

AirAsia's digital businesses reported stronger revenue, up 147% YoY led by contributions from Teleport, which tripled its revenue YoY driven by a higher number of cargo only flights and deliveries.

Earnings before interest, taxes, depreciation, and amortisation (Ebitda) loss was RM207mil for the quarter, which narrowed by 70% YoY and 5% QoQ.

Fixed costs were reduced by 15% YoY despite a low base in 2Q2020, primarily attributed to lower staff costs. Net operating cash flow burn was lower QoQ, averaging RM62mil per month in 2Q2021.

The group's new businesses showed encouraging results.

The airasia Super App reported strong revenue growth of 39% YoY, attributed to new product offerings and commissions.

BigPay posted significant growth in revenue, up 56% YoY driven by payments and remittances.

Teleport’s revenue tripled YoY due to a higher number of cargo only flights and significant delivery demand volume through scheduled cargo networks connecting India, China, Korean and Japan through Asean.

“Our transformation is over and AirAsia Group is now an investment holding company with a portfolio of synergistic travel and lifestyle businesses that leverage data and technology to deliver the best value at the lowest cost, supported by strong data and one of Asia's leading brands that remains committed to serving the underserved," CEO Tan Sri Tony Fernandes said.

He also said that the group have enough money to continue its operations.

“We continue to evaluate funding, potential monetisation and other corporate exercises to ensure sufficient liquidity for the Group," he said.

By the end of the third quarter of 2021, AirAsia will have completed two batches of lease restructuring and expect to complete the full exercise by the end of 2021.

In August, BigPay secured up to US$100mil in financing led by SK Group.

AirAsia has also proposed a renounceable rights issue of up to RM1bil, which was expected to be finalised by the end of this year.

"Positive discussions for raising additional new capital for airlines, Asia Digital Engineering and our digital businesses are ongoing," Fernandes said.

"Through all of our strategic fundraising exercises, we expect to have sufficient liquidity for 2H2021 and throughout 2022,” he added.

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Tony Fernandes , AirAsia

   

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