AirAsia posts record quarterly loss as virus annihilates flights1 min read . Updated: 25 Aug 2020, 04:06 PM IST
AirAsia Group Bhd posted its biggest quarterly loss on record as restrictions imposed by governments to contain the spread of the coronavirus decimated travel
Southeast Asia’s second-biggest budget carrier by market value reported a net loss of 992.9 million ringgit ($238 million) in the three months ended June 30 versus net income of 17.3 million ringgit a year ago, according to an exchange filing Tuesday. Sales plunged 96% to just 119 million ringgit.
Chief Executive Officer Tony Fernandes has been in talks for joint ventures and collaborations that may result in additional investment for the beleaguered airline. Bank loans and other capital-raising proposals are also being weighed.
Airlines globally have grounded thousands of planes as countries shut borders and restricted people’s movements. According to the International Air Transport Association, the industry likely won’t recover to pre-pandemic levels until 2024.
Some signs of a recovery are at least emerging for regional aviation, with Singapore and Malaysia agreeing to form travel bubbles to allow people to move between the two countries. AirAsia, which is based in Malaysia, resumed flights in the domestic market in late April after suspending them for a month.
AirAsia’s auditor Ernst & Young said last month that the carrier’s ability to continue as a going concern may be in “significant doubt" because its current liabilities exceeded its current assets at the end of 2019 even before the pandemic. It also sounded a warning on AirAsia X Bhd, AirAsia’s long-haul arm.
South Korea’s SK Group said in June that it was in talks to buy a small stake in AirAsia, without providing further details. AirAsia has also cut the salaries of management and deferred plane deliveries in an attempt to shave costs by 30% this year.
The budget carrier is one of Airbus SE’s major customers for A320s while AirAsia X is the world’s biggest customer of Airbus A330neo planes. AirAsia X has 78 of the aircraft on order, according to Airbus’s website, and has already deferred delivery of some A330neos.
This story has been published from a wire agency feed without modifications to the text.