PETALING JAYA: Capital A Bhd anticipates stabilizing demand as it enters the second quarter of 2024 (2Q24).
In 1Q24, ending March 31, 2024, the aviation group reported its highest-ever quarterly revenue. Despite this, Capital A incurred a net loss of RM91.6 million, a sharp contrast to the RM57 million profit in 1Q23. This loss translates to 2.20 sen per share. The current quarter’s performance was significantly impacted by a foreign exchange loss of RM370.9 million due to local currency depreciation against the US dollar.
Nevertheless, the group’s revenue more than doubled to RM5.2 billion in 1Q24, up from RM2.5 billion in the previous year, driven by a robust recovery in both domestic and international travel demand. According to a Bursa Malaysia filing, 89% of this revenue came from the aviation segment, with the remaining 11% from logistics, digital, and other businesses.
Capital A is nearing completion of its aircraft reactivation program, with only 19 planes left to be reinstated in the second half of 2024 (2H24). The goal is to have 202 operational aircraft by year-end to meet the growing demand across its expanding network. In 1Q24, about 20% of its fleet was non-operational.
Furthermore, Capital A plans to launch six international routes, capitalizing on the expected demand growth from China’s and India’s visa-free programs in the next two quarters. “We are also committed to enhancing our ancillary offerings, building on the momentum from achieving RM878 million in ancillary income in the first quarter,” the group noted.
The launch of AirAsia Cambodia in May marks the group’s fifth short-haul airline, expected to scale up to three aircraft this year. Capital A also foresees robust growth for its companies like Capital A Aviation Services (Capas), Teleport, Move Digital, and Capital A International.
Capas, through its engineering arm Asia Digital Engineering (ADE), is progressing on schedule with its new hangar at Kuala Lumpur International Airport, maintaining operational readiness for the first six lines in 3Q24 and an additional eight lines in the last quarter. In 1Q24, Capas reported a total revenue of RM250.9 million, primarily from ADE and its inflight catering business, Santan.
ADE has expanded its line maintenance services to Cambodia, aligning with the launch of AirAsia Cambodia, and plans to begin operations in the Philippines and Indonesia by 2Q24 and 2H24, respectively. Santan will continue to benefit from the increase in AirAsia’s passenger traffic.
Earlier this month, Capital A and its advisers announced they are developing a regularization plan to address the group’s financial condition. Listed under Bursa Malaysia’s PN17 category for financially distressed entities since January 2022, the group has been granted an extension until June 30 to submit this plan.
