News
AirAsia Group says liquidity sufficient for 2022
November 23rd 2021
AirAsia Group (AAGB) has sufficient liquidity to see it through 2022 after recording a slightly wider third quarter net loss of RM887 million(US$211.73 million), the LCC group said. Read More » In what has been a familiar story for the aviation industry across the region, passenger numbers dropped 82% for the group, due to travel restrictions stemming from COVID-19. Revenue, impacted by foreign exchange losses, fell from RM468.9 million a year ago to RM295.9 million in the quarter. The group reduced fixed costs by 23% year-on-year, primarily from lower staff outlays and other reduced operating expenses. It also ended the quarter with an improved cash position of RM401 million, helped by cost control, proceeds from Fly Leasing and funds from a convertible loan note into Big Pay. The net operating cash flow burn was lower year-on-year and averaged RM68 million per month in the reported quarter. Earlier this month, the company received shareholder approval for a proposed renounceable rights issue of up to RM1 billion. AAGB CEO, Tony Fernandes, confirmed the process should be completed by year- end. Two batches of lease restructuring also are expected to be completed at the close of 2021 that will see a lower lease rental per aircraft in the future, he said. Fernandes highlighted approval from Danajamin Nasional Berhad (Danajamin) for an 80% guaranteed loan of up to RM500 million to the group and a sign-off from a foreigner lender of a US$150 million loan facility, of which US$100 million has been drawn down. “While we continue to evaluate further funding, potential monetisation and other corporate exercises, as of now we expect to have sufficient liquidity until year-end and throughout 2022,” he said. Fernandes added AAGB had taken advantage of the downtime in flying to fully transform itself into an investment holding company. Over the last 18 months, Asia Digital Engineering, Airasia superapp, Teleport and BigPay had gained significant traction, he said. From an airline perspective, AirAsia Philippines outperformed the group’s other carriers, posting 167% growth in third quarter passenger numbers compared with a year ago. The airline’s 77% Q3 load factor was ahead of the group figure of 67%, which was up a percentage point. “AirAsia Malaysia, AirAsia Indonesia and AirAsia Thailand experienced subdued momentum due to limited operations as travel was restricted for most of the quarter,’’ AirAsia Aviation group CEO, Bo Lingham, said. Positive developments for air travel across Thailand, Indonesia and the Philippines had contributed to a rise in seat sales for immediate and near-term travel in line with the company’s expectations about pent-up demand, he said. “The upcoming year-end holiday season will further spur air travel demand, especially in the visiting friends and relatives (VFR) sector, as well as the leisure and spontaneous travel markets,’’ Lingham forecast. “We expect to see a continuation of this upward trend throughout 4Q and well into 2022 as global travel restrictions continue to ease. Our aim is to fly 60% of our pre-COVID domestic flight capacity by December 2021.”
