AirAsia posts record loss as virus annihilates demand

AirAsia Group posted its largest quarterly loss on record as restrictions imposed by governments to contain the spread of the coronavirus decimated travel. Southeast Asia’s second-biggest budget carrier by market value reported a net loss of 992.9m ringgit ($238m) in the three months ended June 30 versus net income of 17.3m ringgit a year ago, according to an exchange filing Tuesday. Sales plunged 96% to just 119m ringgit. CEO Tony Fernandes has been in talks for joint ventures and collaborations that may result in additional investment for the beleaguered airline. Bank loans and other capital-raising proposals are also being weighed. “During the lockdown, we took the opportunity to restructure the group and lay the foundations for a sustainable and viable business for the future,” Fernandes said Tuesday. “Although we do not foresee capacity returning to pre-Covid-19 levels in the short term, we expect demand to gradually continue to grow throughout the second half of 2020 and for the airline to be profitable in the years to come.” AirAsia said in an earlier statement Tuesday that it had “applied for bank loans in our operating countries to shore up our liquidity.” “Barring any reversal of flight resumption plans and any major shock to demand, we foresee that we have sufficient working capital to sustain the business operations.” AirAsia’s auditor Ernst & Young said last month that the carrier’s ability to continue as a going concern may be in “significant doubt” because its current liabilities exceeded its current assets at the end of 2019 even before the pandemic. <br/>