AirAsia X makes staff cuts, eyes late 3Q21 resumption

As it posted a ballooning loss for the first quarter of 2021 on May 20, AirAsia X (D7, Kuala Lumpur Int’l) has also admitted that it “will not be able to restart scheduled operations until there is an easing of travel restrictions and a gradual reopening of international borders.” With its fleet grounded since April 2020, apart from a limited number of cargo and charter flights, AirAsia X said that Malaysia will remain under its Recovery Movement Control Order until the end of August 2021, which effectively prohibits outbound and inbound international travel while travel restrictions still limit arrivals in many of its Asia-Pacific markets. To maintain liquidity, “we have sought payment deferrals and concessions from our suppliers, lessors, and lenders and reduced capital expenditure wherever possible. Salary reductions have been implemented across all levels of the company apart from the most junior staff,” it outlined in a commentary on prospects. The AirAsia Group low-cost long-haul carrier said it had cut its headcount by 10%, with further reductions planned, primarily in the flight operations-related functions. “We have applied for bank loans to improve liquidity and have commenced bilateral negotiations with our aircraft lessors and maintenance partners to significantly reduce the operating cost base of the company. This process is ongoing. In the current circumstances, the company continues to face severe liquidity constraints,” it said. AirAsia X reported a record net loss of MYR5.67 billion ringgit (USD1.37 billion) in January-March, more than ten times its loss for the same period last year and its eighth quarterly loss in a row. The result was mainly attributable to the impairment of assets, it said, while revenue for the quarter was down 95.8% year-on-year to MYR38.49 million (USD9.28 million). The company, which is still in talks with lessors and creditors to reconstitute MYR64.15 billion (USD15.5 billion) of debt into MYR200 million (USD48 million), stressed that the asset impairment would not impact the restructuring. Meanwhile, AirAsia X has changed the end of its financial year from December 31 to June 30, as it expects the outcome of the restructuring to be known by then, which would, in turn, provide clearer audited financial statements.