AirAsia Group’s long-haul arm said it needs to reach agreements with major creditors to restructure outstanding debt as it faces “severe liquidity constraints” that threaten its ability to resume flying and continue as a going concern. The warning came in an exchange filing Wednesday, in which AirAsia X also reported a net loss for the three months ended June 30 of 305.2m ringgit ($73m), worse than a 207.1m ringgit deficit a year ago. Sales tumbled 91% to 91.4m ringgit. “In the short term, the company will need to seek agreement with major creditors to restructure outstanding liabilities, which have accrued during the period since the start of the Covid-19 pandemic, in order to continue as a going concern,” AirAsia X said in the filing. Securing support from aircraft lessors, maintenance service providers and financial institutions is necessary for the restart of scheduled flights on a staggered basis early next year and a return to profitability, it said. The Malaysia-based budget carrier hasn’t been able to operate any of its usual international passenger services bar a few cargo and charter flights to help repatriate people stranded by the coronavirus.<br/>
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AirAsia Group has fallen even further out of favour after posting a record loss on Tuesday. At least eight analysts tracked by Bloomberg have revised down their recommendations or price targets on AirAsia’s shares since it announced a net loss of 992.9m ringgit ($238m) for the quarter through June. One of them, CGS-CIMB’s Raymond Yap, slashed his target by 74% to just 0.15 ringgit. From a total of 20 analysts, 18 have sell or equivalent ratings on AirAsia and the average price target is 0.56 ringgit. The airline fell 2.8% to 0.685 ringgit Wednesday, taking its loss for this year to 60%. Its long-haul unit AirAsia X has fared similarly poorly. While not enough to sway most analysts, Malaysia-based AirAsia’s earnings statement pointed to some encouraging trends in bookings, flight frequencies and load factors as travel restrictions are lifted in the countries where it operates. The carrier is in fundraising talks with financial institutions to help it through the coronavirus crisis, which ChEO Tony Fernandes has described as “by far” the toughest challenge the company has faced. Citi Research noted Wednesday that AirAsia is looking to raise 2.5b to 3b ringgit through a combination of equity and debt around the end of 2020. It also won’t take any new aircraft over the next two years, said Citi, which has a sell rating on AirAsia and a 0.58 ringgit price target.<br/>
El Al reported on Wednesday a loss of about US$244m dollars on the first half of 2020. According to its Q2 financials report, the company's loss in April-June reached about $105m, compared to a $100m profit in Q2 2019. The report also shows that the company's revenues fell in Q2 by 74% to about $151m, compared to about $584m in the same period last year. El Al's revenue in H1 2020 fell to $472m, compared to about one billion dollars in the first half of 2019, down 53%. Due to the coronavirus crisis, El Al planes were grounded in March, and over 6,000 workers were put on unpaid leaves. Accordingly, the company ended the first quarter of 2020 with a $140m loss.<br/>
Latvian carrier Air Baltic generated a E185m ($215m) net loss during the first six months 2020, representing a nearly sevenfold increase from a E26.6m loss in the same period last year. Revenue declined 62% to E82.5m, while the number of passengers fell at a similar rate to around 800,000 during the pandemic against 2.2m in January-June of last year, Air Baltic says. The number of flights declined 58% to 12,500. CE Martin Gauss states the airline began the year on “a solid track [with] sustainable growth” in January and February before it suspended regular scheduled flights from mid-March until mid-May. “To counteract the crisis, we swiftly cut our capacity and costs, adjusted our business plan Destination 2025 Clean as well as secured financing from our shareholders,” Gauss says. Latvia’s government has agreed to invest up to E250m into the equity of the carrier. The Latvian state’s shareholding in the airline will increase from 80% to 91% under the plan.<br/>