AirAsia X, the medium- to long-haul affiliate airline of AirAsia Aviation Group, reported revenue of RM107 million for the three months ending June 30, 2022, a slight decrease of 5% quarter-over-quarter from the RM113 million reported for the three months ending March 31, 2022.
During the time under review, AAX reported a Loss Before Tax of RM652 million.
It is crucial to note, however, that in terms of earnings, AAX would have returned to profitability and posted a Profit Before Tax amounting to RM0.
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3 million, barring a one-time provision for travel vouchers distributed to passengers and travel agents who were affected by the debt restructuring.
AAX
The Company made a one-time provision for the quarter ending June 30, 2022, totaling RM653 million, primarily for the issuance of the travel vouchers in connection with the commitment that AAX has for its impacted customers and travel brokers. In short, AAX is subject to the terms of the debt restructuring scheme with regard to its debts and liabilities.
Due to this legal restriction, AAX is unable to give travellers and travel agencies any cash refunds. AAX chose to give passengers promotional air privileges in the form of travel vouchers, equal to the full amount of the cancelled flight bookings, in an effort to ensure that impacted passengers could fly with the airline again and as a sign of goodwill.
AAX is now on a steady course to significantly increase scheduled passenger flight operations at the conclusion of its debt restructuring, which was formalised on March 16, 2022, by way of a lodgment of court sanction, in order to meet the high level of unmet demand.
The hike
A multifold increase from the 12 sectors flown during the 3-month period up until 31 March 2022, the total number of sectors operated solely for scheduled passenger flights during the review period stood at 81 sectors.
The organisation of AAX’s operating expenses has undergone a significant change. In addition to an increase in maintenance and overhaul costs, which are primarily attributable to the reactivation of aircraft in preparation for the major operational ramp-up trajectory in the upcoming months, staff costs increased as a result of the reinstatement of staff and salary for employees.
Notably, the decline in charter flights resulted in lower overall fuel expenses despite the rise in fuel prices.
For the period ending June 30, 2022, AAX projected a cash balance of RM25 million, primarily coming from the progressive and promising business opportunities related to the restart of regular passenger flights, charter flights, and cargo flights.
The CEO of AirAsia X Malaysia, Benyamin Ismail, commented on the airline’s performance results and outlook, saying: “In the previous quarter ending 31 March 2022, AAX successfully completed its milestone for the completion of debt restructuring on 16 March 2022.
“Even though the airline operates in a difficult and demanding environment that includes high fuel prices, a weak Malaysian Ringgit relative to the US dollar, as well as ongoing travel restrictions in some important markets like China, Japan, and Taiwan, AAX is now on a strong path to recovery,” the statement continued.
We expect to ramp up flight frequencies and return to daily services to most destinations before 2023, with optimised aircraft utilisation of 15 hours by December.
“We also see positive signs for a stronger return to China and travel restrictions removed in all of our core markets in the not too distant future which will provide a significant boost to our operations.
Also read:
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