AirAsia Group Berhad Reports Third Quarter Pre-Tax Net Loss of $262 Million
AirAsia Group Berhad has reported a third quarter 2021 pre-tax net loss of RM1.1 billion (US $262 million) on a 37 percent year-over-year decline in revenue to RM296 million (US $70.7 million).
On Monday (November 22, 2021), AirAsia Group Berhad reported their third quarter 2021 financial results for the period ending September 30, 2021. The Group reported a pre-tax net loss of RM1.1 billion (US $262 million) on a 37 percent year-over-year (YoY) decline in revenue to RM296 million (US $70.7 million). The company’s EBITDA loss narrowed by 38 percent compared to Q3 2020 to RM281 million (US $67.1 million), while fixed costs were reduced YoY by 23 percent, attributable to reduced staff and operating expenses. Overall, the Group’s loss was attributable to a pandemic-related shortfall in revenue and a foreign exchange loss of RM217 million (US $51.8 million), compared to a Q3 2020 foreign exchange gain of RM44 million (US $10.5 million). AirAsia ended the quarter with RM401 million (US $95.8 million) in cash.
In Monday’s announcement, AirAsia Aviation’s Group CEO, Bo Lingam, said,
“Load factor for the Group remains healthy in 3Q2021 at 67%, up one percentage point attributed to active capacity management to match demand. Growth during the quarter was driven by AirAsia Philippines which grew its passengers by 167% YoY and pushed the load factor up to 77%.
“AirAsia Malaysia, AirAsia Indonesia and AirAsia Thailand experienced subdued momentum quarter-on-quarter due to limited operations as travel was restricted for the most part of the quarter. Nonetheless, in a month-on-month breakdown, AirAsia Malaysia more than doubled the number of passengers carried in September as compared to August, which resulted in a 13 percentage point (“ppt”) higher load factor improvement. The encouraging growth was primarily driven by the opening of the Langkawi travel bubble from 16 September. Since then, we have observed a continuous improvement in bookings, as travel demand gradually recovers following the authorization of nationwide interstate and some limited international travel, since 11 October onwards.
“Aside from Malaysia, recent positive developments for air travel across Thailand, Indonesia and the Philippines have contributed to a significant increase in seats sold for immediate and near-term travel, in line with our expectation of stronger bookings for spontaneous travel due to pent-up demand. The upcoming year-end holiday season will further spur air travel demand, especially in the visiting friends and relatives (VFR) as well as the leisure and spontaneous travel markets. We expect to see a continuation of this upward trend throughout 4Q and well into 2022 as global travel restrictions continue to ease. Our aim is to fly 60% of our pre-Covid domestic flight capacity by December 2021.
“We continued to improve our cost base through stringent cost containment measures. Our 3Q2021 fixed costs reduced 23% YoY, as airline staff costs were down 38% YoY due to headcount rationalization & attrition. Other operating expenses reduced by 11% YoY and another 33% quarter-on-quarter due to strict cost control measures implemented for marketing, rental and IT spend. We have been reporting a zero fuel swap loss since 2Q2021.
“Many countries have started to reopen and allow vaccinated travellers in. Most recently, the governments of Malaysia and Singapore announced the commencement of the Vaccinated Travel Lane (VTL), which paves the way for a gradual flight resumption between these two countries. We look forward to kick starting our Kuala Lumpur-Singapore flights at the end of this month and we are hopeful of the establishment of similar initiatives in other key markets in the near future.
“We continue to work closely with the authorities to ensure that the highest standards of health and safety are maintained at all times. In addition, we have also implemented numerous contactless innovations and procedures to provide a more hygienic and seamless travel experience for our guests and to help restore consumer confidence in air travel.
“With our robust short haul business model, lean operations, contactless procedures, optimized network, strong dominance in Asean combined with pent-up demand, vaccines and travel lane formations, we remain confident of a fast recovery upon the further relaxation of travel restrictions in the near future.”
The Group’s digital businesses reported a revenue increase of 141 percent versus the same period last year, driven by contributions from Teleport, which tripled their YoY revenue. The airasia Super App reported a seven percent YoY growth in revenue attributable to new product offerings and commissions, while Big Pay’s revenue increased 26 percent compared to Q3 2020. The Group’s revenue per available seat kilometer (RASK) improved 48 percent versus the same period last year, while load factor improved by one point YoY to 67 percent.
Source: AirAsia Group Berhad