Malaysia’s AirAsia X Bhd on Monday posted a record quarterly loss of $5.9 billion, eight times more than a year ago, as a multi-billion-dollar provision to cover debts drove operating costs higher.
It was the ninth loss in succession for the airline, an affiliate of AirAsia Group Bhd.
The net loss for the April-June period widened to 24.6 billion ringgit (196.7 billion baht), from a 305.2 million ringgit loss a year ago.
The airline said it made an accounting provision of 23.8 billion ringgit to its creditors during the quarter because it is in default under the contract terms.
Revenue dropped 20.9% to 72.3 million ringgit, versus 91.4 million ringgit.
In a stock market filing, it said the impact of the provision should be temporary.
“The contractual liabilities that the provision is created are waived upon a successful completion of the proposed debt restructuring exercise,” it said.
To reduce costs, the airline group plans to work a reduced fleet and return excess aircraft to the lessors. It said it’s returned one aircraft and is in discussions with other aircraft lessors “to achieve the optimal fleet size”.
Discussions to scale back future lease rental rates are ongoing, as talk with other service providers to scale back maintenance costs.
The airline, which is looking to convene meetings with creditors to propose a restructuring scheme by the end of October, proposed last October to restructure its 64.15 billion ringgit debt into a principal amount of 200 million ringgit.
It said it’s making good progress in negotiations.
The implementation of a fund-raising exercise involving a rights offering and a share subscription for new investors to boost 500 million ringgit, will start providing the upcoming creditors’ meeting approves it, it said.
AirAsia X also plans to apply for a government-guaranteed loan of up to 500 million ringgit, it said.
The group at the end of last year changed its financial year-end from Dec 31 last year to June 30 this year.