AirAsia X posts Q2 loss, starts talks with creditors to reschedule payments, renegotiate contracts

AirAsia X said Wednesday (26 August) that it was “in active engagement” with its creditors to reschedule payments and reduce costs as well as to renegotiate terms of contracts as it tries to survive the global aviation shutdown brought on by the COVID-19 pandemic. In its statement, it also said it suffered a second-quarter net loss of net loss of RM305.2 million (US$73 million) compared to a net loss of RM207.1 million for the same quarter a year earlier. Air Asia X said as part of its survival plans it is continuing to “push through numerous digitalisation initiatives that are being implemented across the wider AirAsia Group which will boost uptake for ancillary and freight services and further reduce costs”, but added that it remains in “hibernation” and is maintaining only minimal operations in support of the repatriation of travellers and transportation of cargo. Seat capacity and the total number of passengers carried during the quarter were recorded at 6,032 and 2,291 respectively, while Passenger Load Factor was recorded at 38 percent. This came on the back of flights ferrying cargo with minimal passenger take-up during the month of April 2020. The company’s affiliate in Thailand recorded revenue of US$4.7 million and the number of passengers carried during the quarter stood at 309 while seat capacity was recorded at 377. AirAsia X Thailand reported a net loss of US$54.2 million for the quarter. AirAsia Group CEO Tony Fernandes. (PHOTO: Shutterstock) AirAsia Group Chairman Tony Fernandes said in a recent interview with The National that he believes AirAsia’s low-cost model is “slightly better” to operate than the full-service model given the current slump in global aviation. “I’d rather be AirAsia than Singapore Airlines, which is really predicated on flying to Europe and America, long-haul travel and business-class travel,” he says. “We are probably at the right end of the spectrum. The second thing that is counting in our favour is that we are in the right geography. Southeast Asia has handled (the pandemic) better than most so when Southeast Asia comes out of it, it will be a longer lasting scenario than other (regions) but it is still quite a ways away for me in terms of international travel.” He said short-haul and regional travel will “still be OK” and AirAsia’s customer surveys show there continues to be appetite for travel to Bali, Phuket and Bangkok, for example. “And it’s going to be a lot of regional travel versus intercontinental travel. We see the domestic demand that people still want to fly and have holidays and meet their relatives. The migratory workforce is still there.” The question remains, Fernandes says, is how long it will take for aviation to pick up again. For Editorial Inquiries Contact: Editor Matt Driskill at [email protected] For Advertising Inquiries Contact: Head of Sales Kay Rolland at [email protected]