AirAsia Narrows Net Loss By 38% To RM720 Million

AirAsia has issued its latest quarter result for FY2021, for Q2 revenue was RM371 million, higher by 161% year-on-year and 24% quarter-on-quarter of a low base of 2020. Its aviation revenue declined 8% quarter on quarter but increased 176% against last year, however the overall performance in aviation is still weak due to fleet not taking off the ground for most of last year.

EBITDA loss was RM207 million for the quarter, which narrowed by 70% YoY and 5% on quarter, fixed costs were reduced by 15% despite a low base in 2Q2020, primarily attributed to lower staff costs. Net operating cash flow burn was lower, averaging RM62 million per month. 

Overall the group recorded a Net Loss After Tax of RM720 million, which narrowed by 38% compared to the Net Loss After Tax of RM1.2 billion in 2Q2020. Although aviation revenue was much higher by 176%, active capacity management and concentration on flying the most profitable routes as well as lease restructuring, asset optimisation and targeted cost control resulted in a 54% reduction in aviation operating expenses. The absence of fuel swap loss for the quarter also contributed to the better performance

On the positive side, its digital businesses reported stronger revenue, up 147% led by contributions from Teleport, which tripled its revenue driven by a higher number of cargo and deliveries. Demand and volume grew through its scheduled cargo networks connecting India, China, Korean and Japan through Asean.

The airasia Super App reported strong revenue growth of 39% YoY, attributed to new product offerings and commissions. While BigPay posted significant growth in revenue, up 56% driven by payments and remittances.

On the performance, CEO Tan Sri Tony Fernandes stated that the group will continue to evaluate funding, potential monetisation and other corporate exercises to ensure sufficient liquidity. AirAsia will by the end of the third quarter this year complete two batches of lease restructuring and expects to complete the full exercise by the end of the year.

In August, BigPay secured up to US$100 million in financing led by SK Group and has also proposed a renounceable rights issue of up to RM1.0 billion, which is expected to be finalised by the end of this year, subject to SC and Bursa’s approval, as well as shareholders’ approval at an Extraordinary General Meeting to be convened. Positive discussions for raising additional new capital for airlines, Asia Digital Engineering and its digital businesses are ongoing.

“Through all of our strategic fundraising exercises, we expect to have sufficient liquidity for 2H2021 and throughout 2022.” Tony Fernandes.

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