Travel Industry News at since 1997. Interviews, podcasts, videos, pictures and more
Wed, 8 July 2020

AirAsia Reports Q1 Net Loss of RM 953 Million

The AirAsia Group, which includes Malaysia, Indonesia and Philippines, posted Q1 2020 revenue of RM2.3 billion, down 15% from RM2.7 billion in Q1 2019.

Despite kickstarting the year with a strong performance in January 2020, the uncertainty of the ongoing global COVID19 pandemic as well as increasing travel restrictions and border controls in regards to COVID19 has led to weaker air travel demand in February and March.

The reduction in Available Seat Kilometre (ASK) by 19% was primarily due to proactive capacity management to mitigate the impact. Q1 2020 ancillary revenue also decreased by 16% year-on-year to RM556 million, dragged by airline ancillary which declined 28% mainly due to removal of processing fees and 22% less passengers carried. Non-airline ancillary revenue grew 27% y-o-y.

The group posted a breakeven in Q1 2020 EBITDA in comparison to EBITDA of RM565 million in Q1 2019, as EBITDA losses incurred in MAA and IAA was cushioned by PAAs positive EBITDA for the quarter. Teleports EBITDA grew 22% to RM63 million in Q1 2020.

AirAsia Airbus A320. Picture by Steven Howard of Click to enlarge.

The net loss for the period was RM953 million (approximately US$ 222.6 million), compared to RM102 million in profit in the previous corresponding quarter. The loss was attributed to a shortfall in revenue amidst impacted travel demand, higher maintenance and overhaul costs by 54% due to the accounting impact from the change in aircraft ownership (MFRS137), loss on settlement from fuel hedging amounting to RM110 million and fair value loss on derivatives of RM270 million.

Operating & Market Share Performance

RASK for the group increased by 2% to 15.33 sen in Q1 2020, attributed to a better pricing strategy adopted since Q4 2019. Load factor was within expectations at 77%. In terms of domestic market dominance, AirAsia Philippines grew the most by 4 percentage points to 22% in Q1 2020. AirAsia Indonesia and AirAsia India also gained market share by 2 ppts each to 4% and 8% respectively.

Cost Performance

Cost per Available Seat Kilometre (CASK) including fuel increased by 36% to 19.81 sen in Q1 2020. Maintenance and overhaul costs increased by 54% y-o-y due to the accounting impact from the change in aircraft ownership. Loss on settlement from fuel hedging amounted to RM110 million in the quarter. CASK excluding fuel increased by 51%.

Bo Lingam, President (Airlines) of AirAsia Group Berhad, said, Our market position remained strong in Q1 2020 despite the challenges faced. We are pleased to see domestic market share gain in three of our Air Operator Certificates (AOC), the highest being AirAsia Philippines which was up 4 ppts. Malaysia remains our strongest domestic market at 61% market share. AirAsia Malaysias RASK grew 2% attributed to improved pricing strategy, while AirAsia Indonesias RASK increased by 3%. Though AirAsia Philippines saw a dip in passengers carried by 9%, load factor remained healthy at 84%.

For each of our operating markets, we have restarted operations in phases and are focusing domestically for now, before opening up to ASEAN and then the rest of Asia when border restrictions are lifted. We continuously engage with stakeholders especially local governments and airports, among others, on collective efforts in reviving air travel.

Since beginning domestic operations in late April, we are encouraged by the increase in load factors week by week. Competition has also remained rational. We are aiming to increase our flight frequencies to around 50% of our pre-COVID19 operations and we look forward to resuming all domestic routes in the coming weeks and months to cater to the increasing demand. Currently, we are operating 365 daily flights across the region. We look forward to the reopening of international borders in recognition of the fact that air transport provides the connectivity that is essential for the resumption of economic activities.


On the digital platforms performance and outlook, Aireen Omar, President (RedBeat Ventures) of AirAsia Group Berhad, said, Q1 2020 demonstrated positive growth performance in our digital businesses. Our logistics arm, Teleport, recorded a higher revenue y-o-y by 49% to RM150 million. During the quarter, Teleport has successfully completed its cargo consolidation across our ASEAN AOCs. Our fintech arm, BigPay reported 161% growth in revenue in Q1 2020, gaining further traction with the expansion of remittance corridors to include India, Bangladesh and Nepal. Australia is the latest addition in June, making up nine countries currently available for international bank transfer.

Latest in the portfolio is OURFARM, which is a new business-to-business (B2B) e-commerce platform to digitalise and transform the agribusiness supply chain by directly connecting agriculture producers and businesses such as hotels and restaurants and boosting their profit through the elimination of middlemen costs. OURFARM covers the end-to-end process from sourcing to delivery, leveraging on our logistics network and airline connectivity. We have already received orders on OURFARM since our launch in June 2020.

We also launched a complete food ordering solution called OURFOOD. OURFOOD is perfect for food and beverage (F&B) businesses (Partner Outlets) that take orders directly on WhatsApp, Facebook and Instagram. Partner Outlets only need to share a customised menu link to their customers to check out for a pre-order or to receive the food delivery instantly. In return, customers can easily pay, check out and track their food order status in real-time with just a single link.

On performance, CEO, Karen Chan, said, We are positive over AirAsia.coms Q1 2020 revenue which was up 118%. As flights are resumed, we are rolling out new offers and promotions in stages to further stimulate demand, focusing on domestic at this point. We received overwhelming response for our recent innovative product, AirAsia Unlimited Pass for AirAsia X, domestic Malaysia and domestic Thailand. We will be rolling this out in other markets soon.

We remain focused on our vision to evolve into a travel and lifestyle platform and competing with existing online travel agents. We made our breakthrough in December 2019 by expanding to include non-AirAsia flights on our website, as well as rolling out AirAsia Deals, which is essentially everyday lifestyle deals from haircuts to F&B, to encourage consumers to actively engage with our platform. We continue to analyse trends in consumers appetite and preferences while ramping up our existing product offerings. At the same time, we are working tirelessly to introduce more exciting products, promotions and collaborations in the near future.


Tan Sri Tony Fernandes, AirAsia Group Berhad CEO, said, This is by far the toughest challenge we have faced since we began in 2001. Every crisis is an obstacle to overcome, and we have restructured the group into a leaner and tighter ship. We are positive in the strides we have made in bringing cash expenses down by at least 50% this year, and this will make us even stronger as the leading low-cost carrier in the region.

On the airline operations, we are encouraged by the strong rebound demand seen since resuming operations in late April 2020 and we foresee this will continue in the coming months. Our innovative product, the AirAsia Unlimited Pass, sold out quickly. Competition is pricing rationally. This bodes well for us to compete in the post-COVID19 world.

Our past sale and leaseback deals serve to be beneficial in the current situation, as leasing provides us the flexibility and room for renegotiating contracts with our supportive lessors and suppliers. To ensure sufficient working capital during these challenging times, we have sought payment deferrals from our suppliers and lenders. We have also restructured a major portion of the fuel hedges with our supportive counterparties and are still in the process of restructuring the remaining exposure. This will help deal with the excess of hedged volume against expected fuel consumption post-COVID19 and reduce the hedging losses if fuel price remains at todays prices. Further measures in managing and containing cost include both the management and senior employees of AirAsia Group volunteering a salary sacrifice, re-negotiating contracts and deferring all non-essential expenditures.

We have applied for bank loans in our operating countries to shore up our liquidity. We have also been presented with proposals to raise capital to strengthen our equity base and/or liquidity from a number of investment bankers, lenders as well as potential investors to help the Company weather the storm caused by the COVID19 pandemic. In addition, AirAsia has ongoing deliberations with a number of parties for joint-ventures and collaborations that may result in additional investments in specific segments of the group's business.

With the group reorganisation completed in 2019 into two pillars, the group continues to push further to enhance the AirAsia way of life ecosystem. Other than the airline group of companies, AirAsia Group has a strong and growing digital pillar which brings together all our digital businesses under RedBeat Ventures (RBV). RBV is positioned to be an Asean triple play business covering e-commerce, logistics and finance, leveraging our extensive reach on and its low customer acquisition cost.

See latest Travel News, Video Interviews, Podcasts and other news regarding: COVID19, AirAsia.

Headlines: Marriott Sets Net Zero 2050 Goal  Qatar Airways to Launch Flights to Almaty, Kazakhstan  CWT Appoints Joel Hanson as SD Global Innovation Business Development  Emirates SkyCargo Upgrades Booking Process with CargoWise  Airbus to Manufacture Three Full-Size Prototype Aircraft Wings  Four Seasons Anguilla Appoints Nicole Lingos Spillane as DOSM  Finnair and Turkish Airlines to Codeshare  Eve Urban Air Mobility Signs MOU with Bristow Group  Boeing Forecasts China's Airlines to Require 8,700 New Planes by 2040  LATAM Airlines to Save Fuel with Airbus' Descent Profile Optimisation Software  World Air Transport Summit and IATA AGM to Take Place in Boston 3-5 October  Bangkok Airways to Resume BKK - TDX Flights on 1 October  Sabre Travel Solutions Appoints Nicole Regel as Senior Director - AU, NZ, SP  Airbus to Deliver US-Completed Commercial Aircraft with SAF  Claude Sauter Appointed GM of The Slate Resort in Phuket, Thailand  Solomon Islands Tourism Industry in Mourning as Jo Tuamoto Passes Away  Cobham Signs New Pool Program Agreement with Embraer  The Langham, Jakarta - Exclusive Video Interview with Gaylord Lamy, GM  Pan Pacific to Open 13 More Properties by End-June 2024  First Flight of CityAirbus NextGen Scheduled for 2023  British Airways Extends Tier Status of Executive Club Members  Emirates to Increase Flights to USA  Marriott Signs W Hotel in Florence, Italy  Airbus Testing Engine Back-Up System for Helicopters  Boeing to Open Final Assembly Facility in Australia  Cathay Pacific Reports Increase in Passenger and Cargo Numbers  Eve Partners Helipass to Promote eVTOL Flights in France  Guillaume Daudin Joins ATR as Senior Vice President - Programmes  Wharf Hotels Opens Regional Sales Office in Guangzhou, China  Richard Poskanzer Appointed GM of Four Seasons Hotel Nashville  Cathay Pacific Pledges to Use SAF for 10% of Fuel Consumption by 2030  WHO Appoints Gordon Brown as Ambassador for Global Health Financing  Centel Appoints Gun Srisompong as CFO  QantasLink Launches Flights Between Brisbane and Proserpine  Alliance Airlines Signs Multi-Year Services Agreement with Embraer  Qatar Airways Joins ICAO's Global Coalition for Sustainable Aviation  United Airlines to Launch Flights Between Washington, D.C. and Lagos, Nigeria  Outrigger Hospitality Appoints Avery Aoki as CFO  Cricket Hong Kong Appoints Geoffrey Ma as Honorary President  Braathens, ATR and Neste to Accelerate 100% SAF Certification  Boeing to Build MQ-25 Stingray Factory in Illinois, USA  Rolls-Royce's All-Electric Spirit of Innovation Aircraft Takes Off for First Time  Rosewood Signs Residential Project in Lido Key, Florida  Etihad Airways Signs New Multi-Solution Technology Agreement with Sabre  Emirates to Recruit 3,500 Cabin Crew and Airport Services Employees  Susan Wheatley Returns to UK as DOSM of The Peninsula London  Air New Zealand and Airbus to Research Hydrogen-Powered Aircraft in Aotearoa  Nihat Yucel Joins Four Seasons Hotel Alexandria at San Stefano as GM  Phoenix Police Department Orders Five Airbus H125 Helicopters  Six Senses to Take Over Management of Luxury Resort in Maldives  CWT to Recapitalize Business  Lufthansa Group Signs Extensive New Distribution Agreement with Travelport  Pan Pacific Opens First Hotel in UK as UOL Completes One Bishopsgate Plaza  British Airways to Launch Flights to Azorean Islands of Sao Miguel and Terceira  Changi Renews ACI's Airport Health Accreditation  GlobalData Reports Decline in Travel and Tourism Sector Deals in August  Hotel Group in Cambodia Makes COVID19 Test Mandatory for Every Guest  Hyatt Signs Luxury Hotel in Changsha, China  Marriott Adds Domes of Corfu in Greece to Autograph Collection  Emirates Expands Virtual Reality Experiences to the Oculus Store  Swedish Project to Establish Technical Roadmap Towards Fossil-Free Aviation  Etihad Airways Signs Multi-Solution Technology Agreement with Amadeus  Bombardier Unveils New Version of Challenger 350  MQ-25 T1 Refuels U.S. Navy F-35C Lightning II Fighter Jet for First Time  Mandarin Oriental Signs Property on Wilshire Boulevard, Beverly Hills  Breeze Airways Increases A220-300 Order to 80; Unveils Livery  IATA Appoints Philip Goh as Regional Vice President - Asia Pacific  Plaza Premium Signs First Airport Lounge in Japan  Industry Must Prioritize Collaboration and Experimentation to Advance NDC Adoption  Association of Asia Pacific Airlines Sets Goal of Net Zero Emissions by 2050  Elbit Systems to Strengthen Naval Defence of Asia Pacific Country  Langham Opens Luxury Hotel in Jakarta, Indonesia  QantasLink Launches Direct Flights Between Adelaide and Townsville  Hong Kong Int. Airport Handled 222,000 Passengers in August  Rosewood Signs Luxury Hotel in San Francisco, USA  Michael Grande Joins Four Seasons Hotel Seattle as Executive Chef  Etihad Airways Upgrades Verified to Fly Service  Cascade Affiliate to Buy Controlling Stake in Four Seasons Hotels and Resorts  TSA Doubles Fines on Travellers Who Refuse to Mask  Emirates to Expand Use of Biometrics and Self-Service Kiosks  Jumeirah to Open Luxury Resort in Maldives on 1 October  United Airlines and Honeywell Invest in Alder's Sustainable Aviation Fuel (SAF)  Emirates to Resume Flights to Saudi Arabia  CWT Retains EcoVadis Platinum Status for Responsible Business Practices  SITA Achieves CarbonNeutral Company Certification  Sabre to Support Biman's Digital Transformation  Ascott Buys More Student Accommodation in USA  Real-World Data Shows Extremely Low Infection Rate on COVID19-Tested Flights  Air Astana Increases Flights to Kyiv and Istanbul  VistaJet's Cabin Hostess Training Now Includes First Aid for Pets  British Airways Launches BA Better World Sustainability Programme  Dassault Aviation in Moscow for RUBAE 2021  Airbus and Alstom to Improve Rail Transport Cybersecurity  IHG Takes Over Management of Hotel in Little India, Singapore  Plaza Premium to Transform Passenger Experience at BLR Airport in India  Thai AirAsia Flights to Chiang Mai, Chiang Rai and Hat Yai Prove Most Popular  SITA to Integrate Iridium Certus Satellit into UAC Portfolio  CWT Integrates Amadeus' Selling Platform Connect into European Service Hubs  Debbie Kristiansen Returns to Bahrain as GM of New Exhibition & Convention Centre  Air Canada Rouge Resumes Flights  US Army Takes Delivery of First Airbus UH-72B Lakota Helicopter  Marriott Opens 8th W Hotel in China  Lufthansa First Airline in Europe to Fly Airbus' New Single-Aisle Airspace Cabin  Banwa Private Island in Philippines Partners Ascent for Luxury Transfers by Air  Steve Carroll and David Ling Join CBRE Hotels & Hospitality - Asia Pacific  Korean Air to Buy Carbon-Neutral Jet Fuel from SK Energy  Deutsche Hospitality Expands Steigenberger Brand to Doha, Qatar  Turkish Aerospace Awarded Two Boeing-Related Contracts by Spirit AeroSystems  Travelport Launches Global Accelerator Program in Collaboration with AWS  Eve and Microflite to Develop Urban Air Mobility Services in Australia  Priority Pass Reports Increase in Airport Lounge Visits  QantasLink Starts Upgrading Inflight Entertainment  Saab to Upgrade Belgium's Air Traffic Control with Digital Towers  Emirates to Take Delivery of Last Brand New A380 in November  Success for Phuket Raceweek 2021  SAS Appoints Head of Media Relations in Denmark  Air Mauritius Appoints APG as GSA in Germany, Italy and Switzerland  Asia-Pacific Airlines' July Int. Traffic Down 94.2% on July 2019  FCM Partners NSF Engagement for JV in Japan  British Airways Reopens Concorde Room at JFK and London Heathrow  Griffin Orders 5 Boeing 737-8 Aircraft  CWT Meetings & Events Appoints Ian Cummings as Global Head  Behind the Scenes of Emirates Airline's Latest Ad - We're on Top of the World  Kazakhstan Orders Two Airbus A400M Aircraft  Executive Appointments at Elbit Systems  Capella Bangkok Opens 2 Verandah Suites and 6 Riverfront Villas  Air Astana to Trial IATA Travel Pass on Nur-Sultan - Istanbul Flights  Jet2 Orders 36 Airbus A321neo Aircraft  Strong Air Cargo Demand Continues in July  Bill Courtney Joins CWT as EVP and CFO  Marriott Opens First Le Meridien Resort in Maldives  Executive Appointments at Emirates  Minor Hotels Signs Third Anantara Resort in Bali, Indonesia  Bill LaPeer Joins CWT as VP of Enterprise Vertical Sales  Shadi Suleman Returns to Qatar as GM of Four Seasons Hotel Doha  Melia Chiang Mai Appoints Director of F&B and Executive Chef  Bangkok Airways to Resume Five Routes  Qatar to Host Biennial Geneva Motor Show from 2023  Plaza Premium to Open Airport Lounge at GRU in Sao Paulo, Brazil  Embraer Opens Office in Budapest, Hungary  Thailand Added to UK's Red List  Singapore Airlines Launches Upcycling Project and Competition with SUTD  Air Astana Takes Delivery of Sixth Airbus A321LR  Malaysia Airlines Upgrades Enrich Loyalty Programme  EU Digital COVID Certificate Should Serve as Blueprint for Other Nations  Bombardier Delivers Fifth Jet for Saab's GlobalEye Surveillance Solution  W Hotel Opens in Philadelphia, USA  Etihad Engineering Partners IAI for Passenger to Freighter Conversions  How's Business in Cambodia? Video Interview with Richard Dusome, MD - Dara Hotels  Puri Hiranprueck (ภูริ หิรัญพฤกษ์) Promotes Family's Private Island Near Phuket  Six Senses Offers Guests Luggage Free Travel  HD Videos and Interviews  Podcasts from HD Video Interviews  RSS News Feed and Ticker  Travel Trade Shows in 2020 and 2021  High-Res Picture Galleries  Travel News Asia - Latest Travel Industry News 

Receive our Latest Travel News Daily Email free of charge by entering your email address and name in the boxes to the right and clicking subscribe. You can also receive the news by WhatsApp, stay updated with our RSS Feed Travel Industry News by, and even Add the Headlines to Your Website free of charge. Have questions? Please read our travel news FAQ.

Copyright © 1997-2021