KUALA LUMPUR (Reuters) – Malaysia's AirAsia X Bhd (Reuters)AIRX.KL) Reported a sharply again third-quarter net loss on Wednesday, the second second consecutive quarter in the red due to higher fuel prices.
FILE PHOTO: Part of the AirAsia X flat as seen at the Garoda Maintenance Facility Erosia in Tangerang, Indonesia, September 20, 2017. Juveniles / Beaviharta
Volatile fuel costs were a significant pressure on the Long-hour budget offshoot of AIRASYA Group BHD (AIRA.KL), And analysts expect that will continue to be a challenge for expansion plans of the airline.
The average price of fuel in the quarter was 40 percent higher than at the same time a year earlier, the airline said.
The airline said in a bursar filing it was working to lead the increase by boosting ancillary revenue and capacity.
"A new farmer's structure is implemented and the company is actively driving up an oncountry revenue, which will ultimately improve yields, while management also remains focused on monitoring operating expenses to achieve better cost effectiveness of offset uncertainty in fuel prices," said.
Group CEO Nadda Buranasiri said that the airline also knew provisions for dubious debts to put short-term pressures on full year earnings.
AirAsia X posted a quarterly loss of 197.5 million ringgit ($ 47.10 million), compared with a net loss of 43.3 million ringgit in July-September last year.
Revenue fell by 4.2 percent to 1.08 billion ringgit on low fare. AirAsia X has its average passenger drive to reduce 5 percent compared to a year earlier.
The airline also observed slowing tourism, especially from China, which currently contributes 1/4 of its total revenue.
In response, it has shifted some future capacities to other core markets such as Japan, South Korea and India.
AirAsia X's Malaysian arm cut capacity by 4 percent in the third quarter as it flew to Tehran and switched to some capacity from Australia to North Asia, said the company.
Its mass factor, a measure of seats filled, rose from 1 percent to 80 percent in the quarter.
AirAsia X also has smaller offshore in Thailand and Indonesia, giving it a total fleet of 32 A320s, which plans to increase by two aircraft this year.
AirAsia X did not provide further information on the potential change under consideration of some of the 34 Airbus (AIR.PA) A330neo Widebody Plains it has on preliminary order to a 321 Neo Engobodies that would help the airline in smaller markets or off-peak seasons.
Reporting by Liz Lee; Editing by Jason Neely and Mark Potter