AirAsia’s net profit soars by 41%

KUALA LUMPUR – AirAsia Bhd’s net profit for its second quarter ended June 30, 2016 soared 40.8% year-on-year to RM342.12mil, boosted mainly by a 40.2% jump in aircraft operating lease income and a 24% reduction in average fuel price to US$59 (RM236) per barrel compared to a year earlier.

Revenue in the second quarter increased to RM1.62bil from RM1.32bil in the previous corresponding period, the low-cost carrier said in a statement on Monday.

Aircraft operating lease income, the second largest component of its revenue after passenger seat sales, grew to RM328.5mil. Passenger seat sales, meanwhile, were up 22.9% to RM991.4mil.

On the performance of its affiliates, AirAsia said 45%-owned Thai AirAsia posted revenue of 7.77 billion baht (RM908.82mil) in the second quarter of 2016, an increase of 13% from the same period last year while net operating profit increased by 69% year-on-year to 671.80 million baht (RM78.56mil).

“This led the associate to post a profit after tax of 767.56 million baht (RM89.78mil) (up 105% year-on-year) in the second quarter of 2016.”

Indonesia AirAsia, in which AirAsia holds a 49% stake, recorded revenue of 887.38 billion rupiah (RM270.6mil) in the second quarter of 2016, down 30% year-on-year which AirAsia said was in-line with the planned 37% decrease in capacity.

“Load factor recorded 10 percentage points improvement to 83%. Meanwhile, IAA registered a lower net operating loss of 84.60 billion rupiah (RM25.8mil) and a smaller loss after tax of 63.35 billion rupiah (RM19.31mil).

Separately, Philippines AirAsia, which is 49% owned by AirAsia Inc (AirAsia’s 40% owned associate), posted an 11% increase in revenue at 2.57 billion peso (RM223.82mil) and strong growth in the number of passenger carried.

“Load factor was at a high of 91%, up by 11 percentage points year-on-year. Cost per available seat kilometre (CASK) increased by 1% to 2.53 peso due to higher depreciation of property, plant and equipment and maintenance and overhaul cost.”

Meanwhile, 49%-owned AirAsia India recorded a 73% increase in revenue at 1.89 billion rupees (RM113.79mil) and carried higher number of passenger.

Commenting on the results, AirAsia chief executive officer Aireen Omar said in a statement that the airline saw good growth and earnings in the second quarter despite it historically being the company’s leanest.

“The highest growth seen among our ancillary products are sale of in-flight merchandise (up 400% year-on-year), AirAsia Courier (up 86%) and connecting fees for our ‘Fly-Thru’ service (up 65%).

“These led to the company recording an ancillary income per pax of RM48 this quarter (up 5% year-on-year). The group recorded a 32% year-on-year increase for Fly-Thru traffic, and Kuala Lumpur remains the largest transit hub with 83% AirAsia Group Fly-Thru traffic with the growth of 31% year-on-year.”

For the six-months period ended June 30, 2016, the low-cost carrier’s net profit more than tripled to RM1.22bil from RM392.36mil a year earlier, while revenue increased to RM3.32bil from RM2.62bil in the previous corresponding period.

Meanwhile, in a separate statement, AirAsia said its board of directors had approved the divestment of Asia Aviation Capital Ltd (AAC), the carrier’s wholly-owned aircraft leasing business.

AAC carries out the aircraft leasing business within the AirAsia group and with third party airlines

AirAsia has appointed RHB Investment Bank, Credit Suisse (Singapore) Ltd and BNP Paribas (acting through its Singapore branch) and BNP Paribas Capital (M) Sdn Bhd, as joint advisers for the potential divestment. – ANN