AirAsia X—the long-haul affiliate of Malaysian tycoon Tony Fernandes’ AirAsia Group—reported its biggest-ever quarterly loss as travel restrictions aimed at curbing the further spread of Covid-19 grounded the budget carrier’s planes.
The airline posted a net loss of 24.6 billion ringgit ($5.9 billion) in the three months ended June 30 following the suspension of flights since the height of the pandemic in April last year, the company said in a statement to Bursa Malaysia on Monday. That’s the ninth consecutive quarterly loss reported by the airline and compares with the 305 million ringgit net loss posted a year ago.
The losses were exacerbated by an accounting provision of 23.8 billion ringgit to creditors, with the airline already in default. “The contractual liabilities for which the provision is made will be waived upon the successful completion of the proposed debt restructuring exercise,” AirAsia X said.
AirAsia X has been negotiating with creditors to restructure its debts amid mounting losses brought on by the pandemic. It has also been discussing returning some of its aircraft to lessors as part of a fleet downsizing exercise aimed at focusing operations on mature routes and terminating flights to unprofitable destinations.
Airlines and other travel-related industries are among the hardest hit by the pandemic as countries around the world closed their borders to contain the virus. AirAsia Group has been pivoting into digital businesses as Covid-19 travel restrictions drag passenger and cargo traffic lower.
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Fernandes and his business partner, Kamaruddin Meranun, took over AirAsia in 2001 to build a low-cost carrier that would make air travel affordable. Fernandes—who dropped out of this year’s ranking of Malaysia’s 50 Richest people—also has interests in hospitality, insurance and education.