Business Round-Up
AirAsia Group loss-making as competition increases
October 1st 2014
AirAsia Group has turned in unexpectedly poor performance results for second-half 2014. While the group’s Malaysian subsidiary, AirAsia Malaysia, remained profitable with a small operating margin, all of the group’s overseas affiliates incurred losses. The group’s performance is in line with results from other low-cost Asia-Pacific carriers as they struggle to maintain yields in a market with too much capacity. Read More »
Thai AirAsia (TAA) posted a rare 318 million baht (US$10 million) loss in second-quarter 2014, following 18 consecutive quarters of profits.
The Thai market has experienced a huge capacity increase in recent months with 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 because of months of political instability.
Meanwhile, the outlook at the group’s two long-haul divisions is positive. Malaysia’s AirAsia X reported a 128.9 million ringgit loss(US$40.9 million) in the quarter to June 30, attributing it to its strategy of capacity and network expansion. Thai AirAsia X was launched in May and its strong load factor and forward booking reports suggest it could be profitable. Japan AirAsia Mark 11 is the group’s only subsidiary that is not currently flying. Its re-launch is planned for 2015 from Nagoya’s Central Japan International Airport (Centrair).AirAsia Group is 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.
