AirAsia X to resume ops early 2021, apply for $122m loan

AirAsia X (D7, Kuala Lumpur Int’l) has outlined as part of its third-quarter report that it is conducting a “rationalisation” of its fleet and routes, as it plots a gradual resumption of operations from “early 2021” and an eventual return to profitability. The report, covering the period ending September 30 and released on November 19, said that the company and AirAsia Group as a whole “plan to focus on core markets to improve yield.” Some of the initiatives include matching optimal frequencies to passenger demand, focusing on mature routes in core markets with historically proven demand, and terminating unprofitable routes. It also plans to operate a leaner fleet, “which will require the group and the company to return excess aircraft to lessors.” The company has “successfully returned one aircraft” and is in discussions with other lessors to cut future lease rates. It also claimed to be in talks with MRO providers “to reduce future maintenance costs.” The validity of the company’s going concern assumption is “highly dependent” on its ability to gradually resume scheduled operations on a staggered basis from the first quarter of next year and its ability to return to profitability. That requires the implementation of the management’s plans to obtain continued support from lessors, maintenance providers, and financial institutions, the report said. AirAsia X is also in talks “with a financial institution” to apply for a government-guaranteed loan of up to MYR500 million ringgit (USD122 million) under Malaysia’s Danajamin PRIHATIN Guarantee Scheme, a MYR50 billion (USD12.2 billion) fund giving working capital to companies impacted by the Covid-19 pandemic to sustain business operations and safeguard jobs. The long-haul carrier posted a net loss of MYR308.5 million (USD75.4 million) for the third quarter, a rise from its MYR229.9 million (USD56 million) net loss a year earlier. Revenue dropped 94% to MYR59.9 million (USD14.6 million).