AirAsia X faces trouble paying salaries / Loss worsens
Thread Starter
Join Date: Oct 2014
Location: exeter
Posts: 3
Likes: 0
Received 0 Likes
on
0 Posts
AirAsia X faces trouble paying salaries / Loss worsens
AirAsia X loss worsens
KUALA LUMPUR, Nov 19:
AirAsia X Bhd, the long-haul arm of Asia’s biggest budget carrier AirAsia Bhd, posted its fourth consecutive quarterly loss as higher operating expenses, foreign exchange losses and finance costs eat into its margins.
The carrier posted a pretax loss of RM224.45 million for the third quarter ended Sept 30, 2014 – an 11-fold increase compared to a RM18.95 million loss in the previous corresponding quarter. Revenue for the quarter was up 16% year-on-year to RM698.76 million from RM601.49 million before.
AirAsia X reported a net loss of RM210.85 million for the July-September quarter, versus a net profit of RM26.44 million a year earlier.
On a cumulative basis, the nine-month pretax loss of RM404.95 million worsened nine-fold from RM42.59 million before even as revenue rose to RM2.12 billion compared to RM1.63 billion previously.
The poor results, largely due to high jet fuel costs, came as total passengers on the budget carrier rose 23.6% to 1.04 million during the third quarter – up from 843,693 before. AirAsia X was operating 24 planes in this quarter compared to 17 last year.
The biggest contributor to revenue was the North Asia sector at RM349.6 million, followed by Australia at RM244.43 million. But, while the North Asia sector initially showed profit, the southern routes lost RM35.79 million in the quarter.
Foreign exchange losses amounted to RM48.22 million. But AirAsia X had RM64.11 million in cash reserves for operations as at Sept 30, 2014.
In its Bursa filing, AirAsia X said: “Fuel costs increased by RM77.4 million or 26.6% to RM368.5 million in the three months ended Sept 30, 2014.
“Fuel costs increased by 54.9% to RM1.16 billion in the nine months ended Sept 30, 2014 from RM748.9 million in the nine months ended Sept 30, 2013 due primarily to increase in fuel consumed from the increase in sectors flown.
“Maintenance, overhaul, user charges and other related expenses increased by 59.8% to RM497.5 million. The increase resulted mainly from the higher maintenance and service costs for the new aircraft delivered and new charter flights.
“The group has received six Airbus A330-300 under operating lease and hence aircraft lease expense has increased by 78.4% to RM211.5 million in the nine months ended Sept 30, 2014 from RM118.5 million in (2013).”
Other major cost hikes were due to increase in marketing and promotional expenditures and higher unrealised foreign exchange loss from operations due to strengthening of the US dollar, plus a 40.4% increase in staff costs with higher headcount, said the carrier.
Looking forward, AirAsia X said: “Losses are attributable to the third consecutive quarter of significant year-on-year ASK capacity increases of over 40%, which resulted in lower yields from a higher proportion of promotional fares used to stimulate new demand creation to fill up the new capacity.
“Our experience suggests that new capacity typically takes about 12 months to break-even.
“Although the capacity expansion created short-term earnings pressure, the company believes that the investment will bear fruit in the long-term.
“The company believes that it now has the highest market share of passengers carried from Malaysia to its core
markets in Australia, China, Korea, Japan, and Taiwan.
“It has also seen a significant increase in the number of connecting passengers between North Asia and Australia, as a result of additional frequencies added to the routes in these markets.”
---------------------------------------------------------------------
KUALA LUMPUR, Nov 18 — AirAsia X Bhd is having trouble paying its staff and was forced to dole out salaries on a staggered basis last month, The Edge Financial Daily reported today amid the carrier’s plummeting share prices on the stock market.
According to the business newspaper, the long-haul sister company to budget airline AirAsia allegedly issued a circular stating that basic salaries, fixed and productivity allowances, and overtime were to be paid on October 24 while variable allowances that include flying, sector and night stop allowances and commissions were to be paid on October 31.
Posting allowances for charter flights, meanwhile, were to be paid on November 5, the daily reported, citing the circular.
The wage issue comes at a time when AirAsia X saw its cash balance drop to RM144.7 million as at June 30 this year, from RM262.9 million as at end of 2013, according to the business daily.
The airline’s finances were not helped by a 59.1 per cent hike to RM897.3 million in its operating expenditure, maintenance costs, aircraft operating lease expenses and other operating expenses.
The losses suffered since the fourth quarter of 2013 have left AirAsia X in a net debt position, the daily noted.
AirAsia X share prices on Bursa Malaysia went down 3 sen to rest at 71.5 sen at the noon break today, after opening at 73.5 sen this morning.
Citing unnamed sources, The Edge Financial Daily reported that the company’s current financial position has put a damper on loan approvals by financial institutions, as the airline continues to maintain its existing route network and take on delivery of new aircraft.
AirAsia X had in December 2013 placed what was reportedly the world’s largest single order in a single purchase agreement of 25 Airbus A330-300 jetliners.
The US$6 billion (RM19.2) deal will more than double the carrier’s current fleet of 20 A330-300 planes.
It currently operates scheduled flight to 21 destinations in Asia, five destinations in Australia and one in the Middle East, on top of offering chartered flights for business travellers.
The airline’s deteriorating finances have since spurred AirAsia co-founder and group chief executive officer Tan Sri Tony Fernandes to take on a “more prominent role” in AirAsia X’s management, sources told the financial daily.
Sources claimed that Fernandes called for a town hall meeting with the airline’s staff to announce a management shake-up at the AirAsia Training Academy in Sepang yesterday evening, with the aim of rebranding the airline.
This includes dropping its chartered airline services and focussing purely on scheduled flights.
AirAsia X has yet to respond to Malay Mail Online’s inquiry on this matter.
KUALA LUMPUR, Nov 19:
AirAsia X Bhd, the long-haul arm of Asia’s biggest budget carrier AirAsia Bhd, posted its fourth consecutive quarterly loss as higher operating expenses, foreign exchange losses and finance costs eat into its margins.
The carrier posted a pretax loss of RM224.45 million for the third quarter ended Sept 30, 2014 – an 11-fold increase compared to a RM18.95 million loss in the previous corresponding quarter. Revenue for the quarter was up 16% year-on-year to RM698.76 million from RM601.49 million before.
AirAsia X reported a net loss of RM210.85 million for the July-September quarter, versus a net profit of RM26.44 million a year earlier.
On a cumulative basis, the nine-month pretax loss of RM404.95 million worsened nine-fold from RM42.59 million before even as revenue rose to RM2.12 billion compared to RM1.63 billion previously.
The poor results, largely due to high jet fuel costs, came as total passengers on the budget carrier rose 23.6% to 1.04 million during the third quarter – up from 843,693 before. AirAsia X was operating 24 planes in this quarter compared to 17 last year.
The biggest contributor to revenue was the North Asia sector at RM349.6 million, followed by Australia at RM244.43 million. But, while the North Asia sector initially showed profit, the southern routes lost RM35.79 million in the quarter.
Foreign exchange losses amounted to RM48.22 million. But AirAsia X had RM64.11 million in cash reserves for operations as at Sept 30, 2014.
In its Bursa filing, AirAsia X said: “Fuel costs increased by RM77.4 million or 26.6% to RM368.5 million in the three months ended Sept 30, 2014.
“Fuel costs increased by 54.9% to RM1.16 billion in the nine months ended Sept 30, 2014 from RM748.9 million in the nine months ended Sept 30, 2013 due primarily to increase in fuel consumed from the increase in sectors flown.
“Maintenance, overhaul, user charges and other related expenses increased by 59.8% to RM497.5 million. The increase resulted mainly from the higher maintenance and service costs for the new aircraft delivered and new charter flights.
“The group has received six Airbus A330-300 under operating lease and hence aircraft lease expense has increased by 78.4% to RM211.5 million in the nine months ended Sept 30, 2014 from RM118.5 million in (2013).”
Other major cost hikes were due to increase in marketing and promotional expenditures and higher unrealised foreign exchange loss from operations due to strengthening of the US dollar, plus a 40.4% increase in staff costs with higher headcount, said the carrier.
Looking forward, AirAsia X said: “Losses are attributable to the third consecutive quarter of significant year-on-year ASK capacity increases of over 40%, which resulted in lower yields from a higher proportion of promotional fares used to stimulate new demand creation to fill up the new capacity.
“Our experience suggests that new capacity typically takes about 12 months to break-even.
“Although the capacity expansion created short-term earnings pressure, the company believes that the investment will bear fruit in the long-term.
“The company believes that it now has the highest market share of passengers carried from Malaysia to its core
markets in Australia, China, Korea, Japan, and Taiwan.
“It has also seen a significant increase in the number of connecting passengers between North Asia and Australia, as a result of additional frequencies added to the routes in these markets.”
---------------------------------------------------------------------
KUALA LUMPUR, Nov 18 — AirAsia X Bhd is having trouble paying its staff and was forced to dole out salaries on a staggered basis last month, The Edge Financial Daily reported today amid the carrier’s plummeting share prices on the stock market.
According to the business newspaper, the long-haul sister company to budget airline AirAsia allegedly issued a circular stating that basic salaries, fixed and productivity allowances, and overtime were to be paid on October 24 while variable allowances that include flying, sector and night stop allowances and commissions were to be paid on October 31.
Posting allowances for charter flights, meanwhile, were to be paid on November 5, the daily reported, citing the circular.
The wage issue comes at a time when AirAsia X saw its cash balance drop to RM144.7 million as at June 30 this year, from RM262.9 million as at end of 2013, according to the business daily.
The airline’s finances were not helped by a 59.1 per cent hike to RM897.3 million in its operating expenditure, maintenance costs, aircraft operating lease expenses and other operating expenses.
The losses suffered since the fourth quarter of 2013 have left AirAsia X in a net debt position, the daily noted.
AirAsia X share prices on Bursa Malaysia went down 3 sen to rest at 71.5 sen at the noon break today, after opening at 73.5 sen this morning.
Citing unnamed sources, The Edge Financial Daily reported that the company’s current financial position has put a damper on loan approvals by financial institutions, as the airline continues to maintain its existing route network and take on delivery of new aircraft.
AirAsia X had in December 2013 placed what was reportedly the world’s largest single order in a single purchase agreement of 25 Airbus A330-300 jetliners.
The US$6 billion (RM19.2) deal will more than double the carrier’s current fleet of 20 A330-300 planes.
It currently operates scheduled flight to 21 destinations in Asia, five destinations in Australia and one in the Middle East, on top of offering chartered flights for business travellers.
The airline’s deteriorating finances have since spurred AirAsia co-founder and group chief executive officer Tan Sri Tony Fernandes to take on a “more prominent role” in AirAsia X’s management, sources told the financial daily.
Sources claimed that Fernandes called for a town hall meeting with the airline’s staff to announce a management shake-up at the AirAsia Training Academy in Sepang yesterday evening, with the aim of rebranding the airline.
This includes dropping its chartered airline services and focussing purely on scheduled flights.
AirAsia X has yet to respond to Malay Mail Online’s inquiry on this matter.
Join Date: Nov 2014
Location: Earth
Posts: 2
Likes: 0
Received 0 Likes
on
0 Posts
"Now Everybody can fly free"
Sorry Tony...no tears for you. You started it and now you are paying for it. You stepped in your own pile and now you got to clean your own shoes off.
