Malaysia's AirAsia Group posts smaller Q1 losses

KUALA LUMPUR, May 27 (Reuters) - A first-quarter net loss at Malaysian flagship budget airline AirAsia Group Bhd narrowed 4.5%, primarily dragged down by depreciation in leased assets and interest on lease liabilities, a stock exchange filing on Thursday showed.

However, the airline which marked its seventh consecutive quarterly loss, saw fair value gains on derivatives and said it had successfully negotiated for deferrals with lessors.

The airline reported a 767.4 million ringgit net loss for the January-March quarter compared with 803.8 million ringgit in losses a year ago. The performance superseded the 234 million ringgit net loss an analyst forecast on Refinitiv.

Revenue plunged 87% to 298.2 million ringgit, as lockdowns in Malaysia at the start of the year to curb coronavirus infections further dampened the sales during the quarter.

Passengers carried totalled 976,968, a 90% drop from a year ago, while the load factor, which measures how full planes are, fell 10 percentage points to 67%.

The group said it focused on providing limited domestic operations in the countries it operates.

“Even if borders remain closed, the Group is well prepared to rely solely on domestic operations alone this year. We remain focused and committed to further strengthen our domestic position at this juncture as we await developments in regards to international air travel,” it said.

The airline also expects to see improved stability in operations as vaccinations continue to be rolled out in all key markets and travel bubbles could be introduced.

Reporting by Liz Lee; editing by David Evans