AirAsia X saw losses rise in the second quarter, as the Malaysian LCC continues to keep capacity in check for the parent carrier and focus growth on its Thai affiliate.

The AirAsia X Group reported a 2019 second-quarter net loss of MYR207.1 million ($50 million), widened from a loss of MYR57.5 million in the same period a year earlier. Foreign exchange rate shifts were a major factor, costing the carrier MYR83.1 million.

The core Malaysian operation cut capacity 6% in the second quarter, with overall aircraft utilization rates falling and fleet size remaining unchanged. The carrier has been streamlining its network to concentrate on core markets.

AirAsia X’s Thai affiliate had 32% more capacity year-over-year in the second quarter, with four more aircraft. However, revenue and passenger growth lagged the capacity increase significantly, as the carrier has a number of new routes “in the infancy stage,” AirAsia X said.

The group posted earnings before interest, taxes, depreciation and amortization (EBITDA) of MYR120.8 million in the second quarter, a significant turnaround compared to last year’s EBITDA loss of MYR60.5 million.

Revenue declined marginally to just over MYR1 billion. Traffic dropped 7%, resulting in load factor falling by one percentage point to 80%. Average fare was up 5%, and average ancillary revenue per passenger rose 4%. Unit revenue was 2% higher.

The carrier aims to grow its Malaysian operation more in the remainder of the year. “With our network rationalization undertaken over the past two quarters we are now poised to focus our growth and presence in our key markets in Northern Asia, India and Australia as we look towards ramping up capacity and driving up utilization going into the third and fourth quarter,” AirAsia X Malaysia CEO Benyamin Ismail said.

Adrian Schofield, adrian.schofield@informa.com