High fuel costs send AirAsia X back to losses in FY18 after two profitable years

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KUALA LUMPUR (Feb 21): 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 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 today.

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

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

Additionally, the group has 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 last 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 the first quarter of 2019, AAX said the current forward booking trend and average fares is 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 leverage on the group’s strategy in new route launches as well as increasing frequencies of core routes, said AAX.

Shares of AAX closed up half a sen or 1.75% at 29 sen today, with 14.89 million shares traded, bringing its market capitalisation to RM1.2 billion. Over the past 12 months, the counter has fallen 28.4% from 40.5 sen.