AirAsia X Records $43m Loss For December Quarter

AirAsia X has recorded a US$43 million loss for the December 2020 quarter. It brings losses at the airline for calendar 2020 to nearly $330 million. The results, announced on Friday, February 26, mean the airline has experienced seven straight losses in a row.  With the airline’s fleet grounded, further losses in the short term are expected.

AirAsia X lost $43 million in the last three months of 2020. Photo: Getty Images

AirAsia X argues performance indicators are “not meaningful”

AirAsia X is the long haul arm of AirAsia. The Malaysia-based business and its various affiliate airlines are struggling to survive the travel downturn. Last week, AirAsia Japan went into court-ordered bankruptcy. AirAsia X is in the process of restructuring and is attempting to write down a $15.9 billion debt.

In the three months to December 31, AirAsia X had revenues of just $13.5 million. The calendar year’s revenue was approximately $278.7 million, largely on the back of monies earned before the travel downturn impacted.

During the last quarter, AirAsia X made no money operating regular passenger services. The airline made $860,772 operating charter services, $954,249 from freight services, and $11,663,833 from aircraft operating lease income.

“During the quarter ended 31 December, the Company has suffered from the full impact of the COVID-19 pandemic,” said AirAsia X when announcing the quarterly results.

“With the suspension of scheduled flight operations in April, and the parking of the majority of the aircraft fleet, the performance indicators for the business are not meaningful.”

AirAsia X earned just $13.5 million in revenue in the three months to December 31. Photo: Getty Images

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Expenses continue as AirAsia X stays on the ground

On the other side of the ledger, AirAsia X spent $7,325,936 on staff costs in the three months to December 31. That includes $6,718,956 on wages, salaries, bonuses, and allowances. A further $606,980 was spent on employee retirement plans. With the fleet grounded and revenue streams thin, AirAsia X was looking to lay off hundreds of employees last year. The airline hopes to re-hire them when business improves.

Aircraft fuel expenses were just $8,854,361 for the fourth quarter of 2020 and $137.2 million for the calendar year. The majority of the fuel expense was incurred in the first three months of 2020. As with airlines elsewhere, a grounded fleet sees the airline’s fuel bill dramatically cut.

Ongoing maintenance and overhaul costs at AirAsia X were $28,338,643 for the three months to December 31 and $129.3 million for the calendar year. AirAsia X has a fleet of 22 Airbus A330-300s sitting idle. However, keeping aircraft on the ground isn’t a cost-neutral proposition. It costs money to maintain and service the parked planes.

AirAsia X’s user charges were $857,319 for the fourth quarter and $24.6 million for the 12 months to December 31. One of AirAsia X’s most vocal creditors is Malaysia Airports Holdings Bhd, managers of many of Malaysia’s airports. Holding AirAsia X’s unpaid bills, they’ve described the airline as “hopelessly insolvent.”

AirAsia X has 22 Airbus A330-300s. Photo: Getty Images

Slimmed-down lease costs suggest lessors giving AirAsia X a break

Aircraft operating lease costs were just $136,145 in the quarter and $328,771 for the calendar year. AirAsia X’s aircraft are leased from around 20 sources. Many of them, including BOC Aviation Limited, have publicly voiced concerns about AirAsia’s ongoing viability. But the slimmed-down lease costs suggest most of the lessors have come to the party and given the embattled airline a break when it comes to payments.

Other operating costs totaled $1,111,358 for the three months to December 31 and $39.6 million for the calendar year.

Despite the loss and no immediate plans to resume flying, AirAsia X continues to push on with its restructuring plan.

Given AirAsia X’s string of losses and fleet grounding, how do you rate its future prospects? Post a comment and let us know.