This article first appeared in The Edge Financial Daily on February 22, 2018

KUALA LUMPUR: AirAsia X Bhd’s (AAX) net profit more than doubled to RM84.41 million in the fourth quarter ended Dec 31, 2017 (4QFY17) from RM39.01 million a year ago, supported by a 12% growth in passenger volume to 1.55 million.

Earnings per share rose to two sen versus 0.9 sen in 4QFY16. Quarterly revenue increased 4.3% to RM1.22 billion in 4QFY17 from RM1.17 billion in 4QFY16.

This was despite higher other operating expenses of RM149.73 million in 4QFY17 — which included a provision for doubtful debts of RM11.8 million — compared with RM109.32 million in 4QFY16.

In a filing with Bursa Malaysia yesterday, the long-haul, low-cost airline said ancillary revenue per passenger increased 4% to RM142 year-on-year (y-o-y) in 4QFY17.

“The seat load factor was at 83%, two percentage point higher than the same period last year. However, average fare was down 8% at RM519 compared with RM565 in 4QFY16,” it added.

The improved quarterly results lifted AAX’s net profit for full FY17 to RM98.89 million, more than doubling that of RM44.84 million the previous year. Revenue was up 17% to RM4.56 billion from RM3.9 billion in FY16.

Based on the current forward booking trend, AAX said forward loads and average fares are trending better than those in the previous year.

“Barring any unforeseen circumstances, including but not limited to terrorist attacks, natural disasters, epidemics, economic downturn, fuel price hike and fluctuation in foreign currencies against the ringgit, the company expects its prospects to remain positive,” it added.

In a separate statement, AAX co-group chief executive officer Tan Sri Tony Fernandes said the airline will have no more wet lease and charter businesses going forward.

“AAX will be adding six leased aircraft in 2018, bringing a total fleet of 36 Airbus 330s by year end. This will be the first year that AAX will be adding aircraft since 2015, demonstrating our confidence in the medium-to-long haul low-cost space.

“We look forward to unlock further synergies with AirAsia Group to fully optimise our route network and we are confident of our ability to leverage on our strengths and scale to meet air travel demand,” added Fernandes.