AirAsia X targets first full-year profit since listing
Steve Creedy - editor
23 Nov 2016
Asian long-haul budget carrier reports third-quarter turnaround.
Long-haul budget carrier AirAsia X says it is on track to record its first full-year profit since publicly listing in 2013 after recording a modest third quarter net result of RM11m ($US2.49m).
Global publicity about a safety incident in Australia did not stop AirAsia X boosting revenue by 24 per cent, to RM982m, in its third quarter ending September 30.
The RM11 million net profit was a significant improvement on a loss f RM288.2 m in the same period last year while an RM50.8m operating profit was up 263 per cent.
“Year-To-Date profit for AAX stands at RM 191.5 million and is on track to record its first full year profit since listing,’’ the airline said in its profit announcement.
The company gained from 54 per cent year-on-year increase in scheduled flight revenue, a 50 per cent growth in ancillary income and a 34 per cent boost to operating lease income.
Passenger numbers for the quarter were up 35 per cent on a year ago and the load factor rose 3 percentage points to 78 per cent despite a 34 per cent increase in the number of seats.
Lower fuel prices helped to cut unit costs by 16 per cent and average fares rose 14 per cent year-on-year due largely to healthy demand from China and North Asia as well as improved connectivity on Fly-Thru routes.
“We are pleased that despite a weak travelling season and increased capacity, we managed to deliver a humble net profit which attests to the commercial viability of the long-haul low-cost model,’’ AirAsia X group chief executive Kamarudin Meranun said in the airline’s profit announcement. “However, much work still needs to be done and the team are focused and committed to ensure positive growth amid these challenging environment.
“The third quarter for Malaysia AirAsia X (“MAAX”) have seen great capacity injected amounting to 10 per cent out of the 32 per cent planned for the whole year. This was to set the tone for future quarters especially the fourth quarter of 2016 and the first quarter of 2017, both historically strong quarters.”
Australia continued to be highest revenue contributor to the Malaysian operations — accounting for 33 per cent of total revenue and 53 per cent of year-on-year growth — as the carrier boosted frequency out of Sydney and the Gold Coast.
Malaysia AirAsia X chief executive Benyamin Ismail said the airline was benefiting from a weaker currency environment that had led to local customers to trade down when going on vacation and boosted interest from other nationalities looking at Malaysia as a value-for-money holiday destination.
“The destinations that we fly to are more appealing compared to higher currency destinations such as Europe and North America,’’ he said.
AirAsia X said its Thai joint venture recorded a strong 85 per cent load factor in the third quarter, up 14 points from a year ago, and it was focusing on turning around the airline.
Indonesia AirAsia X remained suspended after the termination of Sydney and Melbourne services from September 1 “as part of a network restructuring aimed at improving operational efficiencies at IAAX before resuming operations again’’.