AirAsia Group to narrow downside risk despite the rough start of Q1 2020 | DagangNews Skip to main content

AirAsia Group to narrow downside risk despite the rough start of Q1 2020

airasia

KUALA LUMPUR 9 July - Despite AirAsia Group Berhad (AirAsia) showing appalling performance when it recorded  RM803.8 million core net loss in the first quarter of 2020, the group is slightly going stronger in the third and fourth quarters. 

Thus, AirAsia is actively managing costs and does not expect to record as many losses on settlement of fuel in the third and fourth quarters. 

 As at 31 March 2020, it has a RM1.6 billion cash balance. 

“Through a combination of debt and equity financing, it expects to ‘outlive’ the COVID-19 pandemic. 

“Positively, it also stated that average fares have been rising (1Q20: +8% YoY) as the COVID-19 pandemic has caused airlines to cut capacity and competition,” Maybank Investment Research Berhad (Maybank IB) stated in a report. 

Read : AirAsia will come out of the crisis stronger - Tony Fernandes

As of today, AirAsia has resumed flights in five of the six countries it operates while in Japan will resume flights in August 2020.

To note, the recorded core net loss of the group in the first quarter of 2020 came in below Maybank IB expectations at RM531.7 million. 

“The same quarter revenue of RM2.3billion (-15% YoY) also underperformed our expectations at 18% of our financial year estimate at RM648.8 million,” Maybank IB noted. 

The shortfall was due to first quarter passengers carrying falling 22% year-over-year caused by the COVID-19 pandemic and loss on settlement of fuel hedges of RM110 million.

In the second quarter of this year, 60% of fixed costs have been reduced. For financial year 2020, AirAsia hopes to halve cash expenses year-over-year. - DagangNews.com