Friday 29 Mar 2024
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KUALA LUMPUR (May 24): AirAsia X Bhd (AAX) reported profitability for a second straight quarter, reporting a net profit of RM179.49 million or 4.3 sen per share for the first quarter ended March 31, 2016 (1QFY16), compared with a net loss of RM125.92 million or 5.3 sen loss per share a year ago.

Revenue rose 25.2% to RM970.67 million in 1QFY16, from RM775.37 million in 1QFY15. Its net gearing was reduced to 1.2 times, from 1.77 times as at Dec 31, 2015.

In a statement today, AAX said it posted an operating profit of RM105 million in 1QFY16, which coupled with a foreign exchange gain of RM122 million, resulted in the net profit.

"Other contributors to the encouraging results include the progress of the turnaround plan initiated in 2015, and strong return of business from China and Australia markets in 1QFY16," it added.

The long-haul low-cost affiliate of AirAsia Bhd saw a 15% year-on-year (y-o-y) increase in passenger traffic and 31% y-o-y growth in average base fare in 1QFY16.

Yields, as measured by revenue per available seat kilometre (RASK), surged 17% y-o-y, outpacing a 7% y-o-y increase in capacity. The airline's passenger load factor was also up 8 percentage points to 82%, as passenger demand exceeded capacity addition in 1QFY16.

“In 1QFY16, the China market contributed the highest growth to Malaysia AAX operations. Revenue from China increased 49% y-o-y due to higher passenger traffic, while average base fare improved 54% y-o-y," said AAX group chief executive officer (CEO) Datuk Kamarudin Meranun in the statement.

"We foresee this positive trend to carry through to 2016, with the implementation of the visa waiver for Chinese tourists visiting Malaysia, and we expect the strong inbound traffic from China to feed into other core markets," he said, adding that AAX intends to fortify its presence in China, with more new routes from Malaysia and Thailand this year.

“AAX operations in South Korea and Japan have also improved as the group continues to position itself in those markets as the preferred airline to fly to and from Asean and beyond. Likewise, we are strengthening our presence in Australia by resuming capacity growth to high demand routes from Kuala Lumpur, while introducing new FlyThru pairings to connect Australia with Asia and the Middle East," Kamarudin added.

“With these expansions in place, we are expecting 2016’s FlyThru traffic to grow 19% y-o-y and our market share to increase from 3% to 15% of total passengers travelled in our existing markets. The enhanced city pairings for China-Australia, India-Australia and Australia-Tehran, will be the key growth drivers in 2016," he said.

AAX is also expected to take delivery of two more aircraft in the second half of 2016, adding to its current fleet of 29 aircraft.

Moving forward, Kamarudin said AAX will re-evaluate its operation in Indonesia. "The industry’s challenging environment is expected to persist with currency volatility, regulatory uncertainty and other external headwinds.”

In 1QFY16, the airline’s fuel expenses reduced by 11% due to lower fuel prices, which helped to reduce its cost per available seat kilometre (CASK) by 8% y-o-y.

AAX CEO Benyamin Ismail said the group has hedged 100% of the its fuel requirement for the remaining quarters in 2016 at an average jet fuel price of US$54 per barrel, on planned existing routes.

"This will effectively allow us to mitigate fuel cost volatility and better manage cost, while we venture into new routes," he said.

AAX shares closed one sen or 2.56% higher at 40 sen today, for a market capitalisation of RM1.66 billion.

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