AirAsia has posted its first net loss in two years, citing currency exchange losses and higher taxes.
The airline said its net loss for the three months to December amounted to 429m Malaysia ringgit ($120m) from a MYR169m profit for the same quarter in 2013. The airline said foreign exchange losses of MYR647.6m together with higher airport landing costs in Malaysia had contributed to its poor results.
AirAsia chief executive Tony Fernandes also said the December crash, which involved an Airbus A320-200 flying from Surabaya in Indonesia to Singapore, had caused a slight slowdown in demand at the beginning of the year. "But we are seeing it recovering well now," he added. "This year and the next couple of years, the group will not be taking in a large number of aircraft every year like before, hence enabling the company to preserve cash".
AirAsia said it would take delivery of five A320s this year, far less than previously planned, as it has deferred ceo deliveries and converted the same to Neos. The five new aircraft this year will join the fleets of Thailand, India and Japan (if all goes to plan), while the fleet at its home market in Malaysia will remain static at 81.
AirAsia said its yield, or RPKs. However, it didn’t disclose its exact yield, average fares rose 13% in the fourth quarter to MYR171 from a year earlier. The number of passengers carried remained static at 5.9 million in the fourth quarter, this lead to a decline in load factor to 78% from 85% in the same quarter of the previous year as capacity increased. Its cost per available seat kilometre rose 8% to 3.98 U.S. cents.
This is worrying news and this is where AirAsia needs to concentrate efforts in 2015 – fleet management is now key to preventing a further slump in profits. Also in the reported period AirAsia’s maintenance costs more than doubled to MYR42 million as the fleet grows and aircraft age, staff costs rose 20% on year to MYR199 million in the fourth quarter, mainly on the back of staff increases. The airline group provided MYR185 million for depreciation in the fourth quarter, higher than the MYR123 million in the previous year.
However, the company said its fuel bill reduced to MYR621 million in the fourth quarter of last year, compared with MYR648 million in the previous year. Taking advantage of the recent decline in fuel prices, AirAsia has raised its fuel hedging to 50% of its total fuel requirement for 2015 at an average of US$88 per barrel of jet fuel.