Airline News
AirAsia Group loss-making as competition increases
September 2nd 2014
AirAsia Group has presented unexpectedly poor performance results for second-half 2014. While the group’s Malaysian subsidiary – AirAsia Malaysia – remained profitable on a small operating margin, all of the group’s overseas affiliates incurred losses. Read More »
The group’s performance is in line with what other low-cost carriers (LCCs) from the Asia-Pacific have been reporting and hints at overcapacity in the market, analysts say.
Thai AirAsia (TAA) has posted a rare THB318 million (US$10 million) loss in second-quarter 2014, following 18 consecutive quarters of profits.
The Thai market has seen a huge increase in capacity in recent months with new start-up Thai Lion Air and Nok Air providing most of the added seats, whilst putting pressure on yields as growth outpaces demand. The timing for expansion has also been unfortunate, given Thailand’s slump in overseas visitor numbers, particularly from East Asia and Europe, amid ongoing political instability.
Meanwhile, the outlook at the group’s two long-haul divisions is positive. Malaysia Air Asia X incurred a loss of MYR128.9 million (US$40.9 million) in second-quarter 2014, but attributes it to its ongoing strategy of capacity and network expansion. Thai Air Asia X has only launched in May, however, strong load factor and forward booking reports suggest it could be profitable.
Japan AirAsia is the group’s only subsidiary currently not flying. Its re-launch is planned for 2015 from Nagoya’s Central Japan International Airport (Centrair).
AirAsia Group is currently made up of eight airline affiliates: Malaysia AirAsia, Thai AirAsia, Indonesian AirAsia, Philippines AirAsia, India AirAsia, Japan AirAsia, and the two long-haul arms Malaysia AirAsia X and Thai AirAsia X.
