SEPANG, 22 November 2022: AirAsia X, the mid-range affiliate airline of AirAsia Aviation Group, reported its financial results on Tuesday for the Fifth* quarter of 2022, ending 30 September 2022.
The company posted a net profit of MYR25.1 million for the quarter compared to a net loss of MYR652.5 million in the preceding 4th quarter. Revenue was slightly lower at MYR100.1 million compared to MYR107.2 million during the period ending 30 June 2022 (4Q22) due to a reduction in revenue from the freight services segment due to normalised scheduled flight operations.
In other segments, recovery across all key metrics significantly improved as scheduled passenger and charter flights and ancillary revenues demonstrated strong recovery compared to the preceding quarter. For 5Q22, the company posted earnings before interest, taxes, depreciation, and amortisation (“EBITDA”) of MYR25.4 million, while profit before tax for the period stood at MYR23.8 million.
Operationally, the company reported a Passenger Load Factor of 73% during the quarter – less than 10 percentage points short of its pre-Covid-19 PLF of 81% in 2019. The company carried 80,385 passengers during the period under review compared to 8,892 passengers from April – June 2022. Seat capacity grew to 110,615 from 27,521 in the preceding quarter as additional markets and frequencies were introduced in 5Q22.
During the period under review, sectors flown increased to 291 from 226 in 4Q22. Following its return to scheduled services in April 2022, it has made notable progress in network recovery – adding Sydney and two new dense-short-haul routes to Kota Kinabalu and Kuching to its network in September 2022. AAX increased flights to existing markets in Seoul and Delhi to cater for strong pent-up demand.
In terms of balance sheet and cash flow, the company charted a cash balance of MYR79.5 million for the period ending 30 September 2022 – an increase of beyond 100% as compared to MYR25.1 million in the preceding quarter. This was achieved predominantly on the back of a V-shaped air travel revival supporting the resumption of scheduled passenger flights to many of its most popular and profitable destinations, along with charter and cargo flights.
Commenting on the performance and outlook, AirAsia X Malaysia CEO Benyamin Ismail said: “AAX is now well on track in its recovery path even as the airline is compelled to operate in a challenging operational environment dictated by high fuel prices and a weakened Malaysian Ringgit against the US Dollar. While we are cautious of the strenuous operating conditions, we remain confident that the company’s recovery is on the horizon, if not already within our reach.
“In the previous quarter, we resumed our scheduled passenger flights to Seoul and Delhi. We are pleased to report that we have also resumed our services to Sydney and introduced additional frequencies to Seoul and Delhi in 5Q22. Due to high demand, AAX had also commenced operations on dense, short-haul routes during the quarter where demand has exceeded currently available aircraft capacity, namely Kota Kinabalu and Kuching. At the beginning of 5Q22, AAX was charting three flights per week, and this surged to 23 flights per week by the end of the period under review.
“In terms of average base fare, we continue to see a healthy trend of MYR625 during the quarter compared to sub-MYR500 pre-Covid-19. Despite a higher fare environment, we are confident of still providing the best-valued fares in our category in the market. We look forward to resuming services to more of our mid-range destinations in the coming months. Recently, we announced popular destinations, including Melbourne, Perth, Auckland, Tokyo-Haneda, Hokkaido-Sapporo, Jeddah and Bali-Denpasar. By the end of the year, we expect to be flying over 70 flights per week.
AAX operates a fleet of six A330s, down from nine aircraft. Two A330 aircraft were returned during the quarter under review. To meet strong consumer demand, the airline expects to increase its operating fleet to 13 A330 aircraft by the first half of the calendar year 2023.
AAX currently operates scheduled passenger flights to 11 destinations, namely Seoul, Delhi, Sydney, Auckland, Tokyo-Haneda, Jeddah, Melbourne, Perth, and Sapporo, in addition to several dense short-haul routes – Kota Kinabalu, Kuching, and Bali-Denpasar. By 2023, the company expects its network to return to most of its pre-Covid-19 markets and frequencies, with additional new routes to be announced soon.
Why a 5th quarter?
*AAX had on 18 August 2022 announced the change of its financial year end to 31 December 2022, covering a period of 18 months. This came on the back of completing its restructuring exercise to enhance the airline’s operations and recovery strategy, on top of recalibrating its focus on the revamped business plan.