KUALA LUMPUR: AirAsia Group Bhd's core loss of RM772 million in the first quarter is far higher than Kenanga Research's financial year 2020 net loss estimates of RM527 million.
This was owed to lower than expected load factor on virus-led travel restrictions, the firm said in a report today.
With this poor set of results, Kenanga Research widened its FY20 loss forecast further to RM1.11 billion as it cut its load factor assumption to 72 per cent from 79 per cent previously.
The firm said AirAsia had restructured a major portion of the fuel hedges with supportive counter-parties and was still in process of restructuring the remaining exposure.
"AirAsia has resumed its scheduled domestic flights commencing with Malaysia on April 29 2020, followed by Thailand (May 1 2020), the Philippines (June 1 2020) and India (May 4 2020).
"However, over the medium term, we expect AirAsia to face tough operating environment derailed by widespread travel disruptions due to the Covid-19, to be hit by lower load factor."
Kenanga Research said AirAsia had applied for bank loans in its respective operating countries to shore up liquidity, with net cash currently at RM1.0 billion as at March 31 this year.
In addition, AirAsia has ongoing deliberations with a number of parties for joint-ventures and collaborations that may result in additional third-party investments in specific segments of its business.