THE PHILIPPINE UNIT of the AirAsia Group Berhad, Philippines AirAsia, Inc., swung to a net operating loss of P2.11 billion in 2018 from a profit of P710 million in 2017 as it was hit by the rise in price of jet fuel and the weakening of the Philippine peso against the US dollar last year.
In the first quarter of 2019, AirAsia Philippines increased the number of passengers it carried by 23% to 1.97 million, as its capacity was bumped up 17% to 2.16 million.
“Despite the much higher fuel cost in FY2018 (fiscal year 2018), we still managed to add significant capacity in order to set the Group up for a dominant position in 2019. For this year, we are confident that Thailand, Indonesia and Philippines will make up for fuel cost hike in FY2018…,” AirAsia Group Berhad Deputy Group CEO Bo Lingam was quoted as saying in a statement.
AirAsia Philippines grew its revenue 31% in 2018 to P20.91 billion, but its expenses outpaced this increase, as its aircraft fuel expenses alone rose 74% to P8.93 billion. The depreciation of property, plant and equipment also cost the company P359.61 million, or an increase of 53% from in 2017. Maintenance and overhaul costs likewise expanded 41% to P4.18 billion.
“The Group expect to turn around Philippines by focusing on North Asia- Philippines leisure market with target load factor at 90%,” AirAsia Group Berhad said in a regulatory filing.
AirAsia Philippines recorded a load factor of 85% in end-2018. It has so far increased this to 91% in the first quarter, up 4 percentage points from 87% in the same period last year.
The group also noted that despite the challenges in 2018, AirAsia Philippines increased its domestic market share by four percentage points to 19.7% by end-2018.
“In 2019, digital innovation at airports and the delivery of excellent service will be priorities. The Philippines is in a good position to become the next tourism powerhouse in Asean with new airports, hotels and resorts integral to the government’s plan to bring in the numbers,” AirAsia Group Berhad said.
“For its part, our associate seeks to throw open the doors to the many splendours of the Philippines to others from the region and beyond…[W]ith the tenacity that it has demonstrated over the last seven years, we have no doubt that AirAsia Philippines will secure a more prominent place for its beloved country on the regional and international maps,” it added. — Denise A. Valdez