Airline News
AirAsia X’s net losses deepen, not interested in Skymark
August 26th 2014
Kuala Lumpur-based AirAsia X has reported a net loss of MYR128.9 million (US$40.9 million) in second-quarter 2014, down 400% from the MYR32.3 million net loss reported in the year-ago period. Read More »
Air Asia X is not worried, though, and says the deepening losses are a product of its ongoing strategy of capacity and network expansion.
At the carrier’s Kuala Lumpur results presentation, AirAsia X CEO Azran Osman-Rani said: “Although our capacity expansion has put short-term pressure on earnings performance, the long-term strategic advantages are very compelling. We now have our strongest route network, with multiple cities in each of our markets, and strong frequencies that lead to convenient transfer connections.”
Load factor fell 1.4 points to 80.4%.
Meanwhile, fledgling subsidiary Thai AirAsia X has had a promising first three months of operations, recording an 88% average load factor on its inaugural Bangkok-Seoul route and strong forward bookings for its Bangkok-Tokyo (Narita) service.
“The investments in international associates gives us more room for further growth and strengthens our market position in each of our destinations as customers have multiple direct flight options to choose from,” Azran said.
At last month’s Farnborough Airshow, AirAsia X ordered 50 A330neo. These are needed to boost capacity and provide “a huge lead over other players,” says Azran.
Meanwhile, both Skymark Airlines and the AirAsia Group have denied allegations that AirAsia was going to make an equity investment in Japan’s third largest carrier. AirAsia CEO Tony Fernandes tweeted he “had never seen such rubbish,” causing Skymark’s shares to slump last week.
Skymark is facing an uncertain future following its first loss in five years and now faced with the possibility of having to pay as much as JPY70 billion (US$674 million) in ‘rights and remedies’ to Airbus for defaulting on the purchase agreement for six A380s.
