AirAsia sees decline in passengers carried, ASK for 3Q20

These were below our expectations, accounting for 68 per cent and 64 per cent of our financial year 2020 (FY20) forecasts respectively. PublicInvest Research

KUCHING: AirAsia Group Bhd’s (AirAsia) declines in passengers carried and available seat per kilometre (ASK) for the third quarter of 2020 (3Q20) came in below analysts’ expectations.

As per AirAsia’s 3Q20 operating statistics report, the group’s passengers carried recorded an 85 per cent decline year on year (y-o-y) to RM1.9 million, while ASK fell by 86 per cent y-o-y to RM2.7 billion.

“These were below our expectations, accounting for 68 per cent and 64 per cent of our financial year 2020 (FY20) forecasts respectively,” the research arm of Public Investment Bank Bhd (PublicInvest Research) said yesterday.

“Passenger load was at 66 per cent for 3Q20, compared to 84 per cent in 3Q19. Overall, it operated at 19 per cent of last year’s capacity in 3Q20, compared to two per cent in 2Q20.”

The report also revealed that

AirAsia Malaysia operated 52 per cent of its domestic capacity in September, in comparison to 40 per cent in July 2020 as travel demand has been on an upward trajectory since 2Q with the easing of restrictions on interstate travel.

“AirAsia Malaysia achieved a 68 per cent load factor while carrying close to 1.8 million passengers during the quarter,” the group said.

“While capacity has been reduced in October 2020 given the conditional movement control order by the government, AirAsia Malaysia is striving to recover to 60 per cent of its pre-Covid domestic capacity by 4Q.”

Looking ahead, PublicInvest Research gathered that to ensure sufficient liquidity over the medium term, the group is in the midst of securing commitments from banks and is actively exploring capital raising opportunities (i.e. rights issue) in each of its key operating markets.

The research arm recalled that the group had previously aimed to raise approximately RM2.5 billion by the end of the year.

“AirAsia had recently secured a loan of approximately RM300 million from Sabah Development Bank mainly to be used for its digital food supply chain and cold chain facilities in Sabah as well as to part finance the project to turn Kota Kinabalu International Airport into an international hub for AirAsia’s operations.”