AirAsia X's Q3 results hit by rising costs

AirAsia X Bhd said it swung into a net loss in its third quarter from a year earlier, blaming higher costs and lower unit revenues particularly in its main markets of Malaysia and Thailand. The long-haul, low-cost airline cited an overall challenging environment in Malaysia together with higher marketing expenses and lower other income in Thailand, and said both regions saw operating losses.
The airline reported a small profit in its Indonesia business, supported by strong revenue from its Bali routes. AirAsia X said costs, measured in terms of cost per available seat kilometres, rose 6 percent from a year ago, on the back of provision for doubtful debt. A weaker ringgit against the US dollar and higher average fuel prices - up 3 percent from a year ago - also had an impact.
Revenue per available seat kilometres was down 3 percent year-on-year due to increased capacity on existing routes and promotional fares offered to stimulate new routes, it said. For the July-September period, the airline reported a net loss of 43.3 million ringgit ($10.55 million), compared with 11 million ringgit profit a year earlier.
Revenue climbed to 1.12 billion ringgit, supported by a 23-percent growth in passenger volume and 4-percent increase in ancillary revenue per passenger. Better operating statistics and a surge in travel during Malaysia's school holidays and Eid in August failed to cushion the impact of higher costs. Load factor - a measure of how full planes are - inched up 1 percentage point to 79 percent.
The third quarter is seasonally one of AirAsia X's leanest periods, and the airline said it expected a recovery in the following quarter, based on booking trends. AirAsia X also said it wanted to focus on securing high-yield, high-traffic routes and build dominance in core markets across the region. "The group also plans to add third-party leased all-economy class A330s in 2018 to focus on shorter China routes and redeploy our existing fleet to new markets," AirAsia X group CEO Kamarudin Meranun said.