AirAsia X has shed its financially distressed status following an appeal, as it improved its third-quarter earnings on the back of strong passenger recovery.
The medium-haul, low-cost operator had its Practice Note 17 (PN17) status – a categorisation for troubled businesses – uplifted as at 22 November, according to a stock exchange filing.
AirAsia X had been under PN17 status for over two years, and in July this year, unsuccessfully tried to shed the categorisation. In early November, it lodged an appeal to Bursa Malaysia, citing the “significant improvements” to its financial performance.
With PN17 status lifted, AirAsia X chairman Mahmood Fawzy says the airline is “very excited about the new opportunities” in the future.
“AirAsia X was a PN17 company for more than two years, and colossal efforts were made; we completed a debt restructuring exercise amid a global lockdown. Today, we are finally out of the woods against all odds without receiving any financial aid,” he adds.
In uplifting the PN17 status, Bursa Malaysia took into account the airline’s appeal, as well as its latest financial statement for the third quarter.
For the three months to 30 September, AirAsia X doubled its operating profit to MYR60.3 million ($12.9 million), as revenue jumped six-fold year on year to over MYR648 million.
Against the lower base of the year-ago period, AirAsia X saw passenger volume grow more than ten-fold to over 807,000 during the quarter. Compared to the previous quarter, AirAsia X grew capacity about 24%, as it returned more aircraft to operations.
The carrier saw a 78% decline in net profit for the quarter to MYR5.6 million, as it took a hit from foreign exchange losses.
Says airline chief Benyamin Ismail: “Our strategy to enhance the company’s network recovery and strengthen yield in line with demand in our core markets remains a priority. [AirAsia X] is pleased to share that over the past 12 months, all key business performance metrics continued to exceed expectations, even as travel demand has normalised after the initial boom resulting from pent-up demand.”
The airline will soon launch flights to Almaty in Kazakhstan – its first Central Asia point – and Ismail says AirAsia X is looking to tap into “the massive potential China has to offer as the country’s international travel traffic gathers momentum”.
