AirAsia profits climb on rising demand

AirAsia profits climb on rising demand

Malaysian and Thai units improve, but weak rupiah hits Indonesian profits

Malaysian and Thai units improve, but weak rupiah hits Indonesian profits

AirAsia has posted an increase in profits for the third quarter of the year, driven by its fleet expansion and surging passenger traffic.

Releasing its results this week, the low-cost airline group revealed that both revenues and operating profits climbed 3% in the three months to 30 September 2013, driven by a 27% jump in traffic, to 10.6 million passengers.

There were considerable differences however, in the fortunes of its regional units. Malaysian AirAsia (MAA) experienced a solid quarter, with revenues rising 3% to MYR1.28 billion (US$402.1m) and operating profits up 5% to MYR291.1m. Malaysian traffic climbed 11% to 5.3m passengers.

Photo by Cesc Assawin
Photo by Cesc Assawin

But the outstanding performer was Thai AirAsia (TAA), which experienced a 26% jump in revenue, to THB5.60bn (US$176.6m), and an impressive 64% surge in operating profits, to THB377.6m. The Bangkok-based subsidiary carried 2.6m passengers in the quarter – 30% more than the same period in 2012.

Indonesia AirAsia (IAA) however, suffered an 18% drop in operating profit in Q3 2013, to IDR113.57bn (US$9.7m), which AirAsia attributed to the weakness of the Indonesian rupiah pushing up costs. Without the revaluation of the currency, AirAsia said the Jakarta-based airline’s operating profit would have increased 40%. Indonesia AirAsia carried 2.1m passengers in the quarter, 36% up year-on-year, while revenues jumped 35% to IDR1.62 trillion.

No figures were made available for the company’s recently rebranded Philippine carrier, AirAsia Zest.

Commenting on the outlook for the remainder of the year, AirAsia’s group CEO, Tony Fernandes, said he was focused on improving load factors, reducing costs and increasing ancillary revenues.

“The outlook for 4Q13 is strong as our load active yield passive strategy will start to bear fruit. We forecast a record quarter in terms of load factor for MAA as seasonally it is our strongest quarter. As for TAA, it prepares itself with the arrival of Thai AirAsia X in 1Q14 that will definitely add growth to an already booming short-haul business out of [Bangkok] Don Mueang [Airport],” Fernandes said.

He added that he remains “upbeat” about the prospects for IAA.

AirAsia now operates a fleet of 137 aircraft, 32 more than this time last year. Of this fleet, 66 aircraft are based in Malaysia, 31 in Thailand, 26 in Indonesia and 14 in the Philippines.

Mark Elliott
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Mark Elliott
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