AirAsia operator Capital A records loss in Q4 as higher costs weigh
THE parent company of Malaysian budget airline AirAsia, Capital A, on Thursday (Feb 29), reported a loss for the final quarter of 2023, reflecting higher operating and financing costs while logging its first annual net profit since the onset of the Covid-19 pandemic.
Net loss attributable for the three months ended December came in at RM159.6 million (S$45.2 million) compared to a profit of RM109.9 million a year ago.
Capital A shares ended the day 3.5 per cent lower at RM0.69 apiece.
The company is currently getting ready to list its unit, which is the licencee of the AirAsia brand, on Nasdaq after finalising a US$1.15 billion Spac merger.
The firm, which is currently consolidating its long and short-haul brands under one brand, reported a surge in operational costs – mainly aircraft fuel expenses – during the quarter.
Aviation fuel charge surged to RM1.96 billion from RM963.27 million, while maintenance and overhaul expenses more than tripled to RM862.41 million from RM177.9 million.
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Air travel has been getting more expensive in the recent past as prices of jet fuel have been on the rise, hurting airline companies around the world.
The company, however, posted a net profit of RM507.6 million for the year ended December, compared with a loss of RM3.3 billion a year ago, helped by sustained demand for travel and associated services.
Capital A has been categorised as “PN17” or financially distressed by Malaysia’s stock exchange since it was hit hard by travel restrictions during the pandemic.
Brokerage Kenaga Group said it is mindful of Capital A’s financially distressed status, but the company has seen recovery post the pandemic.
However, analysts at Maybank said they think “more has to be done to uplift PN17 classification.” REUTERS
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