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Mon, 3 August 2020

AirAsia X Reports Q1 2020 Results

AirAsia X Berhad has reported a Q1 2020 revenue of RM924.1 million, 21% lower year-on-year from the RM1.17 billion reported during the same period in 2019.

Seat capacity and the total number of passengers carried has decreased substantially on the back of the ongoing global COVID19 pandemic. During the quarter, a total of 1,141,713 passengers were carried, down by 25% y-o-y from 1,512,546 passengers carried during the first quarter of 2019, while seat capacity was cut by 15% y-o-y to 1,544,121 as travel restrictions and border controls lead to a drop in travel demand.

In Q1 2020, the companys Passenger Load Factor (PLF) stood at 74% compared to 83% during the same period last year, while average base fare was RM535, an increase of 4% from RM513 in Q1 2019.

During the quarter, the company posted earnings before interest, taxes, depreciation, and amortisation (EBITDA) of RM94.0 million against EBITDA of RM264.5 million in Q1 2019. Net loss for the quarter increased to RM549.7 million, due to the consequential impact of the COVID19 pandemic.

Wingtip of a Thai AirAsia X Airbus A330-300 aircraft with a Sunbow in the sky over Don Mueang Airport in Bangkok on 14 May 2014. Picture by Steven Howard of TravelNewsAsia.com Click to enlarge.

AirAsia X Malaysias Cost per Available Seat Kilometre (CASK) for Q1 2020 was 14.94 sen, a hike of 16% y-o-y while CASK ex-fuel increased to 10.18 sen compared to 8.16 sen recorded in Q1 2019 on the back of reduced Available Seat per Kilometre (ASK) capacity, ongoing fixed maintenance costs and RM391.7 million in foreign exchange losses due to the depreciation of the Ringgit to US Dollar.

During the quarter under review, AirAsia X Malaysias ASK capacity reduced by 21% y-o-y to 6,874 million as the company scaled back its network and capacity starting with China in early February and eventually to the rest of the network by late March.

In the beginning of 2020, the companys operating environment was aggravated by the COVID19 outbreak. AirAsia X Malaysia scaled down flight frequency to all markets in several phases beginning with China in February. In mitigating the adverse effects from COVID19, we have had to undertake the temporary hibernation of our fleet under AirAsia X Group, as AirAsia X Malaysia suspended all scheduled operations from 28 March 2020 onwards, while AirAsia X Thailands scheduled operations have been suspended since 16 March 2020, said AirAsia X Group CEO, Nadda Buranasiri. During the quarter under review, our associate in Thailand posted a revenue of USD89.6 million, down 29% against USD126.9 million in the same period last year on the back of a lower number of passengers carried, which was recorded at 474,150 passengers, down by 29% y-o-y from 665,432 passengers in Q1 2019. AirAsia X Thailands PLF in Q1 2020 stood at 77%, a decline of 13 percentage points y-o-y, while ASK capacity reduced by 22% y-o-y to 2,645 million during the current quarter. AirAsia X Thailand posted a net loss of USD27.1 million in Q1 2020.

AirAsia X Malaysia CEO Benyamin Ismail said, The COVID19 pandemic is without doubt an unprecedented situation for the world and for the travel and tourism industry in general. Amidst the drop in global travel demand, the company remains proactive in implementing measures to cut cost and conserve cash. In February, as travel restrictions were on the rise and broader international border closures were expected, we undertook gradual capacity reduction to markets we serve; flight frequency to China and Australia was reduced first, followed by Japan and South Korea in March 2020, while Tianjin, Lanzhou and Jaipur were terminated from the companys network. As a result, 24% of total seat capacity for AirAsia X Malaysia was cut for the period of Q1 2020. In March, the Company temporarily suspended all scheduled operations as demand for air travel collapsed following implementation of country wide lockdown restrictions. However, due to increase in demand in the global supply chain for essential goods, the company has kept a handful of aircraft operational in providing assistance to the relevant authorities and to facilitate the repatriation of travellers.

In terms of cost, Benyamin added, In Q1 2020, the companys CASK stood at 14.94 sen while CASK ex-fuel was at 10.18 sen, increasing by 16% and 25% y-o-y respectively due mainly to reduced ASK capacity as the company scaled back on operations whilst fixed maintenance costs continue to be incurred. Furthermore the increase in CASK and CASK ex- fuel is due to foreign exchange losses incurred as a result of the depreciation of the Ringgit to US Dollar offset partially by lower staff costs, fuel expenses as well as user charges.

Outlook

AirAsia X as a Group is expected to remain in hibernation mode and the prospects of resuming scheduled flights is tied to the recovery in international air travel demand in the coming months as and when border controls and travel restrictions ease.

The company is focused on pushing through digitalisation initiatives that are implemented across the wider AirAsia Group which will boost uptake for ancillary and freight services. For 2020, the company has hedged at an average Brent hedge price of USD61.40, while 70% of its 2020 Brent fuel hedging contracts have been restructured in one form or another. As fuel prices remain weak in the near term, the group expects to see some hedging losses.

See also: Airports, Air Travel and COVID19 - Exclusive Interview with SITA's President of Asia Pacific, Sumesh Patel.

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

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