This article first appeared in The Edge Financial Daily on February 22, 2019

KUALA LUMPUR: AirAsia X Bhd (AAX), whose co-founder Tan Sri Tony Fernandes expects 2019 to be its best-ever year, posted a net loss of RM99.27 million or 2.4 sen per share for the fourth quarter ended Dec 31, 2018 (4QFY18), a contrast to a net profit of RM84.42 million or two sen per share in the previous corresponding quarter.

Quarterly revenue dropped 5.93% to RM1.15 billion from RM1.22 billion in 4QFY17, according to its filing with Bursa Malaysia yesterday.

The low-cost long-haul carrier attributed the loss-making quarter to a lower operating profit as a result of an increase in average fuel price of US$89 (RM363.12) per barrel in 4QFY18 compared with US$69 per barrel in 4QFY17.

The carrier reported an operating profit of RM33.91 million for 4QFY18 versus RM130.29 million in the previous year.

Additionally, the group provided an impairment on amount due from joint venture amounting to RM24 million.

For the full year ended Dec 31, 2018, AAX posted a net loss of RM312.7 million or 7.5 sen a share, against a net profit of RM98.89 million or 2.4 sen a share in the previous year. Annual revenue was almost flat at RM4.54 billion, from RM4.56 billion in FY17. Notably, this is AAX’s first loss-making year since 2015.

Looking ahead, the company expects its prospects to remain encouraging, barring any unforeseen circumstances.

For 1QFY19, AAX said the current forward booking trend and average fares are performing within expectations. “AAX will be adding up to five aircraft through operating leases in 2019 via AAX Thailand,” said the carrier.

On the other hand, AAX Malaysia is expected to remain with 24 aircraft as it focuses on maximising aircraft utilisation of its current fleet and leveraging on the group’s strategy in new route launches as well as increasing frequencies of core routes, said AAX.