PETALING JAYA: Amid severe liquidity constraints, AirAsia X Bhd
(AAX) says it has applied for bank loans to improve its financial standing.
In addition, the long-haul budget carrier said it has commenced bilateral negotiations with its aircraft lessors and maintenance partners to significantly reduce its operating cost base.
“The management and directors will continue to seek additional liquidity and work towards a material reduction of the company’s cost base to enable AAX to continue as a going concern in the post Covid-19 environment, when overall demand for international air travel is expected to be significantly below the level of 2019 and previous years, ” AAX said in a filing with Bursa Malaysia.
The company’s revenue fell 21% year-on-year (y-o-y) to RM924.1mil for the first quarter ended March 31,2020, as seat capacity and total number of passengers carried decreased on the back of the Covid-19 outbreak.
During the quarter in review, a total of 1.14 million passengers were carried, down 25% y-o-y, while seat capacity was cut by 15% y-o-y to 1.54 million, as travel restrictions and border controls led to a drop in travel demand.
“In January, the company was charting profits at an operating level, which serves as a testament to the network rationalisation efforts undertaken since 2019. It was only since February during the onset of Covid-19 that the demand for air travel was impacted, ” AAX said.
The group slid into a net loss of RM549.7mil, or 13.3 sen per share, for the first quarter of the year, compared with a net profit of RM43.3mil.
Group chief executive officer Nadda Buranasiri said its operating environment was aggravated by the Covid-19 outbreak in the beginning of this year.
“AAX Malaysia scaled down flight frequency to all markets in several phases beginning with China in February, ” he said in a statement.
In mitigating the adverse effects of Covid-19, it has had to undertake the temporary hibernation of fleet under AAX Group, as AAX Malaysia suspended all scheduled operations from March 28, while AAX Thailand’s scheduled operations have been suspended from March 16.
