AIRASIA Group Bhd slipped into the red with a net loss of RM303.72 million for the financial year ended December 31, 2019 (FY19) compared with a net profit of RM1.97 billion in the preceding year.

The weaker bottom line, despite a 17% jump in revenue to RM12.45 billion, was partly attributed to accounting treatment of restructured aircraft ownership and moving from owning to leasing aircraft, despite recording similar cash outflow in either financing method, the low-cost airline said.

The group reported a net operating loss of RM457.08 million for the year. 

“However, after adjusting major one-off items, FY19 will reflect a net operating profit of RM56.3 million,” it said in a filing with Bursa Malaysia today.

According to the company, the adoption of the Malaysian Financial Reporting Standard (MFRS) 16 reduced its net operating profit by RM130.9 million while the MFRS 137 accounting treatment led to a 43% jump in maintenance and overhaul costs.

The airline’s bottom line was partly weighed down by a depreciation of right-of-use assets of RM1.76 billion and finance costs (lease liabilities) of RM505.87 million following the adoption of MFRS 16.

In addition, its prior year’s performance benefited from a re-measurement gain of RM534.7 million as well as a gain from partial disposal of investment in a former subsidiary of RM350.32 million following a share swap exercise. 

For the fourth quarter (Q4) ended December 31, 2019, AirAsia Group’s revenue grew by 19% to RM3.36 billion from RM2.82 billion previously, driven by 11% year-on-year (y-o-y) capacity addition and a 9% increase in revenue per available seat kilometre (RASK).

Net loss narrowed to RM384.48 million for the quarter from RM394.97 million in the previous year’s corresponding period.

“Air travel demand held firm as we carried 9% more passengers y-o-y. Q4 2019 ancillary revenue also grew by 16% y-o-y to RM732 million, with non-airline ancillary revenue up 105%,” it said. – Bernama, February 27, 2020.