Air Asia Group has highlighted interest from banks and other investors to shore up its liquidity following another difficult quarter.
“We have also been presented with proposals to raise capital to strengthen our equity base and/or liquidity from a number of investment bankers, lenders as well as potential investors to help the company weather the storm caused by the Covid-19 pandemic," the airline group stated.
Air Asia had MYR618 million ($150 million) in cash and cash equivalents at the end of the third quarter, down from MYR2.2 billion a year earlier.
“We have applied for bank loans in our operating countries to shore up our liquidity. In Malaysia, we are securing commitments from the banks for the government guarantee loan under the Danajamin Prihatin Guarantee Scheme while our Philippines and Indonesia entities are currently in various stages of bank loan applications,” the group said.
The Malaysian company reported an operating loss of MYR1.02 billion ($250 million) for the quarter ended 30 September, from an operating profit of MYR264 million in the year-ago quarter.
It posted a MYR1.18 billion operating loss in the second quarter, to 30 June 2020.
Group revenues in the third quarter slumped 86% year on year, to MYR443 million, while expenses decreased 36%, to MYR1.92 billion.
The group reported a negative EBITDA of MYR451 million for the third quarter, compared with a positive EBITDA of MYR662 million a year ago. Excluding an impairment of receivables of MYR444 million, fuel swap losses of MYR281 million and a one-off MYR394 million gain on the disposal of spare engines, the group’s adjusted EBITDA was negative MYR120 million, it said.
Air Asia’s third-quarter net loss was MYR1.08 billion, a steep increase from last year’s quarterly net loss of MYR67.5 million. Of the MYR1.08 billion loss, MYR663 million is related to depreciation of right-of-use assets and interest on lease liabilities, which totalled MYR10.4 billion and MYR1.4 billion, respectively, as at 30 September.
The group continues with its “cost containment measures, including the right sizing of manpower and salary cuts for management, staff and directors, while efforts to preserve cash include negotiations for restructuring of payments with lessors, suppliers and partners as well as restructuring of fuel hedging positions are ongoing”.
The group’s franchises did not fare much better in the third quarter than their parent.
Thai Air Asia reported revenues of THB2.1 billion for the third quarter, down from THB9.4 billion a year earlier, while Air Asia India achieved revenues of INR2.2 billion, down from INR7.2 billion.
Indonesia Air Asia has not reported its third-quarter performance yet; Air Asia Japan declared bankruptcy last month and exited the market.
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