AirAsia X posts loss on voucher provision

AirAsia X

AirAsia X (AAX) announced Wednesday (24 August) that it recorded revenue of RM107 million (US$23.8 million) during the period ending 30 June 2022, down by 5 percent quarter-on-quarter as compared to RM113 million posted during the period ending 31 March 2022.

In terms of bottomline, AAX posted a Loss Before Tax of RM652 million during the period under review. AAX said it would have returned to profitability and posted a Profit Before Tax amounting to RM0.3 million, barring a one-off provision for travel vouchers distributed to passengers and travel agents who were affected by the airline’s debt restructuring.

For the quarter ending 30 June 2022, the company rendered a one-off provision amounting to RM653 million primarily for the issuance of the travel vouchers in relation to the commitment that AAX has for its affected passengers and travel agents. For the purpose of a summary, AAX is bound by terms of the debt restructuring scheme in respect of its debts and liabilities. AAX is legally restricted from providing any cash refund to passengers and travel agents. In its aim to ensure that affected passengers are able to fly with the airline again, and as a gesture of goodwill, AAX  opted to offer promotional air privileges in the form of travel vouchers to passengers, amounting to the full amount of the cancelled flight bookings caused by the pandemic.

At the completion of its debt restructuring – which was formalised on 16 March 2022 by way of a lodgment of court sanction – AAX is now on a steady course to significantly increase scheduled passenger flight operations to meet strong pent up demand.

During the period under review, the total number of sectors operated solely for scheduled passenger flights stood at 81 sectors, a multifold surge from the 12 sectors flown during the three-month period until 31 March 2022. There has been a notable shift in the operating expenses structure of AAX. Staff costs increased on the back of the reinstatement of staff and salary for employees, in addition to an increase in maintenance and overhaul costs, attributed primarily to the reactivation of aircraft in preparation for the major operational ramp-up trajectory in the coming months. Notably, despite the increase in fuel price, total fuel expenses  reduced on the back of a decline in charter flights.

In terms of balance sheet and cashflow, AAX charted a cash balance of RM25 million for the period ending 30 June 2022, primarily generated from the progressive and promising business opportunities centred around the resumption of scheduled passenger flights, charter and cargo flights.

Regarding the airline performance results and outlook, CEO of AirAsia X Malaysia Benyamin Ismail remarked: “In the previous quarter ending 31 March 2022, AAX successfully completed its milestone for the completion of debt restructuring on 16 March 2022. Even as the airline operates in a strenuous and demanding environment which features high fuel prices and a weakened Malaysian Ringgit against the United States Dollar, coupled with remaining travel restrictions in certain key markets such as China, Japan and Taiwan, AAX is now on a strong path to recovery.”

Currently, AAX operates a fleet of five A330s from a fleet of 11 A330 aircraft. The airline expects to increase its operating fleet to 15 A330 aircraft by the first half of calendar year 2023 to meet strong consumer demand. AAX currently operates scheduled passenger flights to Seoul, South Korea and Delhi, India, and has announced  a return of services  to Australia and Japan by end of the year, in addition to new long haul routes to  Istanbul, Dubai and London.

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