Southeast Asian airline group AirAsia has just put out its fourth-quarter and full year 2020 financial results. Unsurprisingly, the group posted another loss as the global health crisis continues, and travel restrictions remain in place. Let’s take a look at the numbers and the impact suffered by AirAsia in recent months.
It should be noted that the AirAsia Group, also referred to in the article as the “Consolidated Group,” refers to its Malaysia, Indonesia, and Philippine airline units and digital subsidiaries.
Stay informed: Sign up for our daily and weekly aviation news digests.
Q4 results by the numbers
AirAsia’s financial performance in the fourth quarter, when compared to the same quarter the previous year, was disappointing but not surprising. Here are some of the key metrics coming from the airline’s Q4 financials:
- Airline revenue decreased 92% year-over-year. This was due to partial lockdowns in Malaysia in October and November.
- Non-airline revenue declined 46% year-over-year.
- The AirAsia Group successfully reduced fixed costs by 61% year-over-year. This is attributed to lower maintenance costs, workforce reductions, reduced ground handling costs, and salary cuts. The Group also negotiated for aircraft deferrals with lessors.
The airline notes that the loss it experienced during the fourth quarter is primarily attributed to “a shortfall in revenue amidst subdued travel demand as international borders remained closed.” It also notes that it was impacted by a fuel hedging loss of RM391 million ($94.3 million).
Additionally, the bankruptcy costs for AirAsia Japan amounted to RM20 million ($4.82 million).
AirAsia’s 2020 full-year performance
For the full financial year 2020, the AirAsia Group’s unaudited financials show a revenue of RM3.1 billion ($750 million). This marks a 74% decline from the group’s 2019 full-year revenue. Additionally:
- Airline revenue (excluding digital subsidiaries, etc.) declined 75%
- The Consolidated Group operated 29% of capacity compared to 2019.
- 2020’s average load factor was 74%
- Fixed costs were reduced by 52%. A notable effort to further reduce cash burn was the sale of a 32.7% stake in AirAsia India, “effectively ceasing the entity as an associate.”
Airline stands optimistic that recovery is underway
Despite posting significant losses, the airline group is fairly optimistic given current trends, saying:
“The Consolidated Group’s operational recovery in 4Q2020 performed exceptionally well amidst the challenging market conditions, as key operational metrics demonstrated strong improvements in December in comparison to September, with the doubling of passengers carried by AirAsia Philippines while AirAsia Indonesia multiplied its number of passengers carried by 11 times. [At the same time,] AirAsia Thailand, increased the number of passengers carried by 31%…” -AirAsia Group
Bo Lingam, AirAsia Group’s President of Airlines, says that the airline is prepared to see a surge in demand post-pandemic. He is also expecting “improved stability” in operations as vaccinations continue to be rolled out.
The CEO of the AirAsia Group, Tan Sri Tony Fernandes, was equally optimistic. Fernandes notes that the group will be ramping up its domestic operations in key markets, concentrating on its most profitable and popular routes. AirAsia is also “actively exploring opportunities to gain market share, especially in the Philippines and Indonesia, recognizing our strength in the ASEAN region.”
What do you think of AirAsia’s fourth quarter and full-year 2020 performance? Is there anything you wished they would have done or not done? Let us know in the comments.
from Simple Flying https://ift.tt/3djYDrv
via IFTTT
Comments
Post a Comment