AirAsia Lost RM177million in fourth Quarter
Filed Under (Business News) by Webmaster on 01-03-2009
Tagged Under : AirAsia, fourth quarter, loss
Budget carrier AirAsia Bhd (5099) made its second consecutive quarterly loss of RM176.9 million for its fourth quarter, as it took a hit from an exceptional item loss of RM426 million.
Group chief executive officer Datuk Seri Tony Fernandes said the loss was attributed to AirAsia completely unwinding all its remaining fuel hedges and some of its interest rate swap (IRS) derivative structures.
But by doing so, Fernandes said, AirAsia will be better positioned this year to deal with oil prices having fallen and lending rates reduced.
“If we cut our losses now, we will recover very quickly if oil prices remain around US$40 per barrel. Also, we fixed our IRS at 3.25 per cent to 5.2 per cent for roughly 12 years two years ago, not anticipating the current global situation,” Fernandes said in a conference call with analysts yesterday.
He remains bullish on AirAsia’s outlook, expecting a 15 to 20 per cent increase in AirAsia passengers for 2009 due to routes expansion to China, India and Singapore.
“We will also launch aggressive promotional campaigns and enhance customer service delivery to counter the weak global economy. The focus is on maintaining high load factor, driving ancillary income and expanding market share,” he said.
The aim is to increase ancillary income contribution from nine per cent to 15 per cent in relation to overall revenue contribution.
Revenue for the three-month period ended December 31 2008 grew 32 per cent to RM838.3 million from RM632.7 million one year ago.
This was due to higher passenger volume by 21 per cent to 3.3 million and higher contribution from ancillary income by 78 per cent to RM73.8 million
Its core operating profit doubled to RM194 million compared with the previous corresponding period.
For the first time since its listing in 2004, AirAsia posted a net loss of RM471.7 million for its full year ended December 31 2008 due to losses of RM641 million in unwinding its fuel and IRS derivatives structures.
This was a 167 per cent plunge from its net profit of RM697.6 million a year ago.
“In relation to fuel, we are now completely un-hedged for 2009. We will ride the market this year and if we do hedge for 2010, it will be clean vanilla swaps,” Fernandes said.
Revenue for the full year grew 37 per cent to RM2.64 billion as passenger volume grew 22 per cent to 11.8 million. Its load factor for last year was 75 per cent.
AirAsia expects it affiliates Thai AirAsia, Indonesia AirAsia and AirAsia X to perform better this year and contribute positively to the group.
Meanwhile, Fernandes said he is optimistic that operating costs in the soon-to-be-built permanent low-cost carrier terminal (LCCT) will be lower.
AirAsia has had five meetings with airport operator Malaysia Airports Holdings Bhd (MAHB) so far on the new LCCT, to be built at the Kuala Lumpur International Airport in Sepang.
“We are confident we will resolve our discussions with MAHB within the next week or so,” he said.- BTimes
