July 30, 2020 / 11:52 AM / 16 days ago

Malaysia's AirAsia X posts first-quarter loss, seeks liquidity

KUALA LUMPUR (Reuters) - Malaysia’s AirAsia X Bhd (AIRX.KL) fell to a net loss in its first quarter as the pandemic slowed air travel demand and continues to face severe liquidity constraints, it said in a bourse filing late Thursday.

Tail of AirAsia X plane as seen at the Garuda Maintenance Facility AeroAsia in Tangerang, Indonesia, September 20, 2017. REUTERS/Beawiharta/Files

It was the airline’s fourth straight quarterly loss.

“The management and the directors will continue to seek additional liquidity and work towards a material reduction of the company’s cost base to enable AirAsia X to continue as a going concern in the post COVID-19 environment,” it said.

AirAsia X, the long-haul unit of AirAsia Group (AIRA.KL), also flagged expectations that international travel demand will be significantly poorer even after the pandemic.

This month, auditors EY issued an audit opinion stating AirAsia’s 2019 earnings were prepared on a going concern basis, which is dependent upon a recovery from the COVID-19 pandemic and successful fundraising efforts.

The airline said it has sought payment deferrals and concessions from suppliers, lessors and lenders and reduced capital expenditure.

It has also restructured a major portion of its fuel hedges, and is still in the process of restructuring its remaining exposure.

“We have applied for bank loans to improve liquidity and have commenced bilateral negotiations with our aircraft lessors and maintenance partners to significantly reduce operating costs,” it said.

AirAsia X’s fleet was grounded in mid-April apart from a limited number of cargo and charter flights.

It recorded a net loss of 549.7 million ringgit ($130 million) for the January-March quarter versus a profit of 43.3 million a year earlier.

Revenue fell 21% to 924.1 million ringgit.

Passengers carried fell 25% to 1.14 million and the airline’s load factor, which measures how full planes are, shrank 11 percentage points to 74%.

Unit costs rose 16% while unit revenue registered zero growth despite ancillary revenue per passenger growing 8%.

Reporting by Liz Lee; editing by Jason Neely

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