AirAsia X earnings double on more passenger volume

The higher revenue allows it to more than double its net profit to RM84.4m

By NG MIN SHEN / Pic By TMR File

AirAsia X Bhd said the higher revenue due to increased passenger volume and ancillary revenue has allowed it to more than double its net profit to RM84.41 million in the fourth quarter ended Dec 31, 2017 (4Q17).

The long-haul unit of budget airline AirAsia Bhd made a revenue of RM1.22 billion for the quarter against RM1.17 billion registered tin the previous year.

In a statement yesterday, AirAsia X said the improved revenue was supported by a 12% growth in passengers carried at 1.55 million.

“This was ahead of the 8% ASK (available seat per km) capacity growth, allowing the company to record a load factor of 83%,” it said, adding that ancillary revenue per passenger grew by 4% to RM142 year on- year (YoY).

Average fare fell by 8% to RM519 compared to RM565 achieved in 4Q16, due to lower fares across the group’s key markets, in line with its load active strategy.

Revenue per ASK fell 3% YoY to 13.36 sen in the quarter due to increased capacity on existing routes in ensuring market dominance, which resulted in slightly lower yields.

Cost per ASK (CASK) was lower by 6% YoY at 12.15 sen, while CASK ex-fuel dropped 8% YoY to 7.96 sen, mainly due to lower maintenance and overhaul on the back of over accruals from the previous quarters, and better aircraft utilisation.

“Despite the 3% increase in fuel consumption in 4Q due to more sectors flown, as well as higher average fuel price which was up 9% YoY, we managed to improve cost efficiency in other cost areas, which effectively lowered overall operating expenses,” AirAsia X co-group CEO Tan Sri Dr Tony Fernandes (picture) said in the statement.

Operating expenses in the quarter include the provision for doubtful debts of RM11.8 million.

The group’s Malaysia operations continued to increase capacity with a higher load factor in 4Q to cater to year-end travel demand.

Thai AirAsia X’s load factor grew by 13% YoY to 91% as the Thai tourism industry recovered from the mourning period due to the passing of the Thai king last year.

The Thailand operations also recorded a 26% YoY growth in revenue, while passengers carried rose 27% from a year ago.

Net profit recorded during the quarter stood at US$7.3 million (RM28.5 million).

Indonesia AirAsia X posted a net loss of US$918,000 in 4Q17 against a net loss of US$279,000 in 4Q16, as operations were hampered due to volcanic activity in Bali during the September- December 2017 period.

Fernandes said the airline is now focused on point-to-point and building fly-through traffic by leveraging on the AirAsia group network, after having grown its North Asia segment — particularly China and Korea — significantly in 2017.

“There are no more wet lease and charter businesses going forward. AirAsia X will be adding six leased aircraft in 2018 for a total group fleet of 36 A330s by end-2018. This will be the first year that AirAsia X will be adding aircraft since 2015, demonstrating our confidence in the medium- to longhaul low-cost space,” he said.

AirAsia X Malaysia and Thailand AirAsia X will add three aircraft each this year, while the group is planning high-yielding routes for Indonesia AirAsia X in 2018 to continue its turnaround.

“Both North Asia — especially Japan — and India will be a key focus for the AirAsia X group this year, as we continue to drive country dominance in our core markets,” Fernandes added.