Cost control, higher revenue help AirAsia Group narrow Q2 net loss
AirAsia Group narrowed its losses in the second quarter of 2021 due to the increase in revenues.
On September 8, 2021, AirAsia Group reported it ended the second quarter of 2021 with a net loss after tax of 720 million Malaysian ringgit ($146 million), an improvement of 38% compared to the same period in 2020.
According to the group, capacity and route management, ongoing aircraft lease restructuring, and cost control attributed to the narrowed losses and increased revenues.
In Q2 2021, AirAsia Group posted 371 million Malaysian ringgits ($76 million) in revenues, an increase compared to 119 million Malaysian ringgits ($24 million) in Q2 2020. Following the financial report, airline operating expenses were reduced by 54% while fixed costs were reduced by 15% “largely due to lower staff costs”.
“We continued to see positive outcomes from our stringent cost containment measures,” said Bo Lingam, president of AirAsia Group .
However, due to the rise in COVID-19 cases in Southeast Asia, Lingam acknowledged that AirAsia Malaysia, AirAsia Thailand, and AirAsia Indonesia “experienced subdued momentum” in recovery. AirAsia Philippines, on the other hand, had a load factor of 78% during the quarter.
Lingam added that quick and efficient vaccination rollouts will ensure a strong recovery for AirAsia’s short haul business model once the travel restrictions are lifted.
“With the accelerated vaccine rollouts across Asean, we expect to see more vaccinated travel lanes and vaccine bubbles forming which will boost a V shaped resumption of air travel in the near future,” Lingam explained.
Commenting on the group’s financial report, Tony Fernandes, the CEO of AirAsia Group, said he expected to have sufficient liquidity for the second half of 2021 and throughout 2022 thanks to the group's strategic fundraising exercises.
In September 2020 the group introduced its new digital venture arm AirAsia Digital. The new company includes non-flying services such as catering, logistics, payment, and travel offers. AirAsia Digital was launched as part of plans to transform the AirAsia brand into a digital company.
“Our transformation is over and AirAsia Group Berhad is now an investment holding company with a portfolio of synergistic travel and lifestyle businesses that leverage data and technology to deliver the best value at the lowest cost, supported by strong data and one of Asia's leading brands that remains committed to serving the underserved,” Fernandes added.
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