Why did AirAsia X record a RM312 million net loss in FY18?

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AirAsia X Recorded RM312 Million Net Loss in FY18 Due to Multiple Factors

AirAsia X Bhd reported a net loss of RM312.69 million for the financial year ended December 31, 2018, a significant shift from the RM98.89 million net profit recorded in the previous year. This downturn was accompanied by a slight decrease in revenue, which fell to RM4.54 billion from RM4.56 billion. The airline also experienced a net loss of RM99.27 million in the fourth quarter of 2018, compared to a RM84.42 million net loss in the same period of 2017.
Increased Fuel Prices Impacted Operating Profit

A primary contributor to the decline in net operating profit during the fourth quarter of 2018 was the substantial rise in average fuel prices. These prices escalated from US$69 per barrel in the fourth quarter of 2017 to US$89 per barrel in the fourth quarter of 2018. This increase in a key operational cost directly affected the airline's profitability during the period.
Impairment Charge Affected Financials

Further impacting the financial results, AirAsia X provided an impairment charge amounting to RM24 million on an amount due from a joint venture in the fourth quarter of 2018. This charge was not present in the corresponding quarter of the previous year, adding to the financial pressures experienced by the Group.
Cost Management Efforts Showed Some Improvement

Despite the overall net loss, the airline demonstrated progress in cost management. The cost per available seat kilometre (CASK) in the fourth quarter of 2018 saw a one per cent improvement, reaching 12.27 sen. Notably, the CASK excluding fuel costs improved by a more significant 16 per cent year-on-year, indicating successful efforts in controlling other operational expenses.
Fleet Strategy for 2019 Outlined

Looking ahead, AirAsia X plans to expand its fleet by adding up to five aircraft through operating leases in 2019, primarily via its subsidiary AirAsia X Thailand. In contrast, AirAsia X Malaysia is expected to maintain its fleet of 24 aircraft. The focus for AirAsia X Malaysia will be on maximising the utilisation of its existing fleet, alongside strategic new route launches and increasing frequencies on core routes.

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Why did AirAsia X record a RM312 million net loss in FY18?

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