AirAsia India, a joint venture between AirAsia Berhad and Tata Sons, has sunk 69.1% in its revenue for the quarter of September, primarily due to COVID-19 affecting the travel industry.
The Indian subsidiary of the Malaysian airline reported revenue of ₹221.55 crore for the September quarter, down from ₹724.24 crore in the year-ago period, AirAsia Berhad said in a filing to Malaysian stock exchange on Tuesday.
“Average fare also saw an increase of 12% to ₹3,143 as compared to 3Q19. The average load factor was 62% with AAI (AirAsia India) operating 65% of its fleet,” it added. AirAsia India “suffered losses due to the decline in revenue”, the Malaysian parent said, but did not put a number to it. It added that the losses reported by the Indian entity were not equity accounted for as past losses have exceeded AirAsia Berhad Group’s cost of investments in the company.
Meanwhile, AirAsia Berhad reported its fifth consecutive quarterly loss on Tuesday. The airline reported a net loss of 851.8 million ringgit ($209 million) for the September quarter compared with a 51.4 million ringgit net loss a year ago, while revenue fell 85.6% to 442.9 million ringgit.
Malaysia’s AirAsia Behrad, which owns 49% stake in AirAsia India, had last week said that it is evaluating its loss-making budget airline joint venture in India with Tata Sons Ltd–which owns 51% stake in the airline–in the wake of the losses caused due to the coronavirus pandemic.
“Our businesses in Japan and India have been draining cash, causing the group much financial stress. Cost containment and reducing cash burns remain key priorities evident by the recent closure of AirAsia Japan and an ongoing review of our investment in AirAsia India,” AirAsia Berhad had said in a statement last week. The Malaysian company said it will continue to focus on the ASEAN region, where its operations are the strongest.
AirAsia India which began operations in 2014, has never reported an annual net profit despite being conservative with its growth plans. AirAsia India’s losses widened to ₹332 crore in the June quarter mainly due to the lockdown and travel curbs to contain the pandemic, sharply increasing from the ₹15.11 crore loss it had reported in the same period last year.
