AirAsia planes are seen on the runway at Kuala Lumpur International Airport August 19, 2014. AirAsia Bhd, Asia's largest budget airline by passengers, said second-quarter net profit rose 529 percent due to foreign exchange gains, the deferment of tax
IN PHOTO: AirAsia planes are seen on the runway at Kuala Lumpur International Airport August 19, 2014. AirAsia Bhd, Asia's largest budget airline by passengers, said second-quarter net profit rose 529 percent due to foreign exchange gains, the deferment of taxes and higher passenger numbers. Picture taken August 19, 2014. Reuters/Olivia Harris

Malaysian carrier AirAsia will be slashing its number of flights to Australia prompted by a whopping loss in its third quarter financial performance. The Malaysian budget airline disclosed a $62.8 million loss for the July to September period, where $36 million came from the Australian segments.

AirAsia X chief executive Asran Osman-Rani attributed the major turbulence to the downing of Malaysia Airlines MH17, which gave off a resulting demand slowdown caused by fear of security and terrorism risks. The aviation disaster has likewise induced the company to slow down on its expansion plans and just continue with cost-reduction initiatives.

The long-haul, low-cost airline said in a statement yesterday that two of its planes will be sold off while it will delay the delivery of six Airbus jetliners for the next three years. It will likewise trim flight frequencies.

AirAsia services Australia from the Sydney, Melbourne, Perth, Adelaide and the Gold Coast to Kuala Lumpur route. It offers flights of up to twice daily, depending on the route. But capacity allocation in 2015 will see a drop in the number of flights to Australia, the company said, while North Asia and other regions will see an increase in [the] number of flights. It did not exactly specify which Australian flights will be slashed.

"In light of the changing market landscape in Malaysia, where travel demand has softened and the industry capacity is moderating, we see less need to continue expansion in our core Malaysian route network in 2015," The Star Online quoted Azran said. "This will allow more time for routes and capacity added in 2013 and 2014 to mature and reach profitability, as average fares increase in line with demand."

A report by the Sydney Morning Herald said that as of Sept 30, AirAsia's cash on hand was only already a measly 124.6 million ringgit (AU$43 million), less than half the amount it had on Dec 31, 2013. Revenue per available seat kilometre for the July to September period dropped by 7.8 percent. Operating costs, meantime, shot by 12.5 percent as its fleet expanded from 17 to 24 A330 widebody aircraft.