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21. Derivative financial instruments (cont’d.)
(ii) Interest rate contracts
The notional principal amounts of the outstanding interest rate contracts at 31 December 2017 were RM3.492 billion (2016:
RM4.061 billion).
The Group has entered into interest rate contracts to hedge against fluctuations in the USD LIBOR on its existing floating rate
aircraft financing for aircraft delivered from 2005 to 2017. As at 31 December 2017, the Group has hedged 100% of its existing
USD aircraft loans at rates from 1.8% to 5.2% per annum (2016: 1.8% to 5.2% per annum) via interest rate swaps, interest rate
caps and cross-currency swaps. Gains and losses recognised in the hedging reserve in equity on hedging instruments as of 31
December 2017 will be continuously released to the income statement within finance cost until the full repayment of the term
loans (refer Note 31 to the financial statements).
(iii) Fuel contracts
The outstanding number of barrels of Singapore Jet Kerosene, Brent and Crack derivative contracts of the Group and the
Company as at 31 December 2017 was 771,487 barrels and 530,316 barrels respectively (2016: 4,848,218 barrels and 4,848,218
barrels).
As at 31 December 2017, the Group and the Company have entered into Singapore Jet Kerosene fixed swap Brent option, Brent
fixed swap and Crack fixed swap contracts which represent 13% (2016: 75%) of the Group’s and the Company’s total expected
fuel volume for the financial year 2018. This is to hedge against the fuel price risk that the Group and the Company are exposed
to. Gains and losses recognised in the hedging reserve in equity on Brent and fuel derivative contracts as of 31 December
2017 are recognised in the income statement in the period or periods during which the hedged forecast transactions affect the
income statements.
22. Inventories
Group
Company
2017
RM’000
2016
RM’000
2017
RM’000
2016
RM’000
Consumables, in-flight merchandise and others
68,234
43,866
47,676
43,650
During the year, the amount of the inventories recognised in operating expenses of the Group and the Company was RM60,231,000
and RM22,090,000 respectively (2016:RM92,207,000 and RM51,658,000).
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AirAsia Berhad
REPORTS AND FINANCIAL STATEMENTS