AirAsia Bhd, Asia's biggest budget airline, reported a third-quarter net loss on Thursday, hit by foreign exchange losses and a writedown on its Indonesia AirAsia affiliate, and said it was looking to move to consolidated accounting for the group.
The move comes months after Hong Kong-based GMT Research issued a report questioning the Malaysian company's accounting practices and alleged that the airline used transactions with its foreign associate airlines to inflate earnings.
"On consolidation of accounts for the whole group, the company's auditor attempted to revisit their opinion on this matter and we are hopeful that the group will be allowed to consolidate and therefore present a fairer view of the group's performance and financial position," the company said on Thursday.
Founded by Group Chief Executive Tony Fernandes, AirAsia has grown from a two-plane operation in 2002 to become a billion-dollar business and said on Thursday it had provided segmental reporting of its associates for the first time.
AirAsia has been seeking to address market concerns of high debts and dues owed by Indonesia AirAsia and Philippines AirAsia and said quarterly results from both associates missed their forecasts. It said Indonesia AirAsia made a loss after tax of $19.9 million and Philippines AirAsia a loss after tax of $29.1 million.
Overall, AirAsia reported a net loss of 406 million ringgit ($96 million) for the quarter, having made a net profit of 5.4 million ringgit in the same period last year. It blamed foreign exchange losses, its share of losses incurred by the associates and one-off costs related to the sale and leaseback of aircraft.
In particular, the airline booked prior-year unabsorbed losses of 469 million ringgit at its Indonesian associate.
Fernandes saw this as a temporary setback for the main airline, however. "We see a great end to the year and a light at the end of the tunnel for the Malaysian operations after a series of headwinds that affected our operations," he said.
AirAsia said last month its major shareholders were evaluating "all strategic options" after Reuters reported that its founders were looking at taking the airline private. The company gave no update on this.
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