Malaysian budget airline AirAsia Group Bhd said its net loss for the third quarter ended on Sep. 30 widened to 887 million ringgit ($212 million) versus 851.8 million ringgit ($203 million) a year earlier, citing a shortfall in revenue and a foreign exchange loss.
Revenue for the period plunged 37 percent to 295.9 million ringgit ($70.47 million) due to lower travel demand amid the lockdown imposed in Malaysia, which has been in effect since January 2021.
Its digital businesses, however, reported stronger revenue. AirAsia said its logistic business Teleport had tripled compared to the same period last year, contributing 53 percent to the group’s total revenue.
In a stock exchange filing on Nov. 22, AirAsia said that a foreign exchange loss of 216.9 million ringgit ($51.66 million) impacted its financial performance during the quarter, compared to a foreign exchange gain of 44 million ringgit ($10.48 million) in the same period last year.
The airline carried 351,971 passengers in the third quarter, down 82 percent from 1.9 million in the previous year, while its load factor remains unchanged at 67 percent.
“Growth during the quarter was driven by AirAsia Philippines which drew its passengers by 167 percent YoY [year-on-year] and pushed the load factor up to 77 percent,” it said.
Operating expenses for the third quarter were reduced by 65 percent year-on-year while fixed costs were reduced by 23 percent year-on-year, of which airline staff costs declined the most by 38 percent.
AirAsia said it aims to fly 60 percent of its pre-COVID domestic flight capacity by December 2021, citing “a continuous improvement in bookings” as travel demand gradually recovers since domestic travel reopened in the region.
“Aside from Malaysia, recent positive developments for air travel across Thailand, Indonesia, and the Philippines have contributed to a significant increase in seats sold for immediate and near-term travel, in line with our expectation of stronger bookings for spontaneous travel due to pent-up demand,” it stated.
The airline has also completed two batches of lease restructuring, which will help to lower lease rental per aircraft in the future, and it expects to complete the full exercise by the end of the year.
Group chief executive Tony Fernandes said in a statement that AirAsia received shareholder approval for a rights issue of up to 1 billion ringgit ($238 million) at the Extraordinary General Meeting on Nov. 11 and expects to complete the exercise by the end of the year.
“While we continue to evaluate further funding, potential monetization, and other corporate exercises, as for now we expect to have sufficient liquidity until year end and throughout 2022,” Fernandes remarked.