KUALA LUMPUR (Reuters) - Malaysian carrier AirAsia X Bhd will freeze domestic capacity expansion and cut flights to Australia next year as it seeks to turn around a sequence of losses amid soft demand from customers in an increasingly competitive market.
AirAsia X announced the moves after it said on Thursday it slid into a July-September net loss of 210.9 million ringgit ($62.8 million), its fourth straight quarterly loss, on higher operating expenses, foreign exchange losses and finance costs. A year earlier it made a net profit of 26.4 million ringgit.
The company’s shares dropped as much as 7 percent on Tuesday, touching an all-time low since its listing in July 2013. They have lost 30 percent year-to-date, compared with the benchmark stock index’s 2.6 percent drop.
The airline said it does expect a turnaround already this quarter, as capacity in the industry falls and with global fuel prices having dropped significantly in the past few weeks.
But Air Asia X said it won’t add new aircraft in Malaysia next year in a plan designed to allow routes and capacity added within the country in the past two years to mature and turn a profit.
The airline will also reduce the number of flights to Australia, but boost frequencies to North Asia and other regions.
AirAsia X will also slow down capacity growth after revising its planned plane deliveries: it will take on six aircraft instead of eight next year, four instead of eight in 2016 and five instead of eight in 2017.
Parent AirAsia is scheduled report its own third-quarter results later on Wednesday. (bit.ly/1BLAKD5)
Reporting by Al-Zaquan Amer Hamzah and Yantoultra Ngui; Editing by Anand Basu and Kenneth Maxwell