AirAsia X posts higher 2Q on strong passenger growth

By MARK RAO / Pic By MUHD AMIN NAHARUL

Airasia X Bhd saw its net profit jump to RM47.44 million for the second-quarter ended June 30 this year (2Q17), compared to RM1.02 million in 2Q16, in tandem with a higher turnover for the period.

The low-cost carrier under the AirAsia group recognised stronger revenue of 17.7% year-on-year (YoY) to RM1.04 billion for the quarter, due to the increase in passengers, supported by higher seat capacity.

Seat capacity expanded by 26% YoY to 1.72 million seats over the same period, while 1.39 million passengers were carried, representing a 34% increase from 2Q16 with an 80% load factor.

AirAsia X group CEO Datuk Kamarudin Meranun said in a statement yesterday the stronger fiscal performance was achieved, despite the airline registering lower average base fare by 14% to RM455, a step taken to increase demand.

“We are pleased that despite challenging market conditions, we still managed to deliver the numbers in what was historically a lean quarter, which again attests to the commercial viability of the long-haul low-cost model,” Kamarudin said.

“The 2Q17 for AirAsia X has seen more available seat kilo- metres (8.45 billion) capacity injected compared to 2Q16 — this is to set the tone for future quarters, especially 4Q17 and 1Q18, both historically strong quarters.”

He said Australia remains Malaysia-based operations’ highest revenue contributor, with China close behind after the introduction of Wuhan as a destination in the first-half of this year.

“However, average base fare suffered from yield pressure as we increased capacity on core existing routes with our market dominance strategy.” Going forward, AirAsia X aims to re-strategise its position in Australia, while focusing on opportunities in the North Asia region.

“The low-cost carrier is also streamlining operations across the board to further unlock greater synergies with the AirAsia group,” Kamarudin said. “We expect this cost reduction initiatives will help us achieve up to 10% cost savings.”

However, the depreciation of the ringgit against the US dollar remains a key concern for AirAsia X, with a large portion of the company’s borrowings and operating costs denominated in the US dollar.

The airline did not declare a dividend for the quarter.