AirAsia X’S Q3 net loss widens on higher forex losses, taxation

AirAsia planes sit on the tarmac at Kuala Lumpur International Airport August 28, 2016. AirAsia X’s revenue for the quarter under review decreased to RM1.01 billion from RM1.08 billion previously. — Reuters pic
AirAsia planes sit on the tarmac at Kuala Lumpur International Airport August 28, 2016. AirAsia X’s revenue for the quarter under review decreased to RM1.01 billion from RM1.08 billion previously. — Reuters pic

KUALA LUMPUR, Nov 13 — AirAsia X Bhd’s net loss widened to RM229.89 million in the third quarter (Q3) ended September 30, 2019, from RM197.47 million a year earlier due to a RM67.5 million rise in foreign exchange losses as well as deferred taxation of RM71.76 million.

However, its net operating loss for the quarter shrank to RM69.46 million compared to RM205.23 million in 2018’s corresponding period, mainly due to the recognition of airport incentives and a lower fuel price, it said.

In addition, an impairment of RM138.2 million had been provided for in Q3 2018, the long-haul budget airline said in a filing with Bursa Malaysia.

Meanwhile, its revenue for the quarter under review decreased to RM1.01 billion from RM1.08 billion previously.

For the nine-month financial period, AirAsia X’s net loss grew to RM393.67 million from RM213.43 million in the same period last year while revenue rose to RM3.19 billion from RM3.41 billion previously.

On its prospects, the airline pointed out the challenges posed by the weakening of the ringgit against the US dollar and the recent implementation of a departure levy from all Malaysian airports, as well as “irrational competition” in the local aviation industry.

“However, the company is safeguarded against fuel price volatility as 86 per cent of the airline’s fuel requirement for the fourth quarter of this year is hedged at average Brent hedge prices of US$61 (RM253) per barrel,” it added.

Amid these headwinds, the group would actively capture revenue opportunities and exercise cost discipline to boost profitability in this challenging macroeconomic environment, AirAsia X said.

“Demand and load factors are expected to remain at a reasonably healthy level. In addition, it is worthwhile to note that average base fare is trending higher year-on-year in quarter four,” it said.

The carrier said its management continued to work on reducing costs, including investment in digitalisation as part of AirAsia Group-wide initiatives that are expected to help reduce costs in the long run.

“The company expects fourth quarter 2019’s overall core results to remain reasonably healthier operationally year-on-year as the management remains committed to ensure sustainable growth amid challenges in the global aviation industry,” it added. — Bernama

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