Flight attendants of the long-haul carrier AirAsia X watch a performance during the launch of the company's prospectus in Kuala Lumpur June 10, 2013. REUTERS/Bazuki Muhammad/File Photo GLOBAL BUSINESS WEEK AHEAD PACKAGE - SEARCH 'BUSINESS WEEK AHEAD 21 NOV' FOR ALL IMAGES
KUALA LUMPUR: AirAsia X Bhd
(AAX), which posted annual net losses from 2013 to 2015, is on track to a positive 2016 after reporting its fourth successive quarterly profit.
In a filing with Bursa Malaysia, the long-haul low-cost airline affiliate of the AirAsia group said it made a net profit of RM11.03mil in the third quarter (Q3) ended Sept 30 compared with a net loss of RM288.19mil a year earlier.
The turnaround was attributed to the 24% higher revenue of RM982.4mil as well as cost efficiencies.
The increase in revenue, the company said, was mainly due to a 54% year-on-year (y-o-y) increase in scheduled flight revenue to RM610.2mil, a 50% growth in ancillary income to RM161.8mil and a 34% rise in aircraft operating lease income to RM113.6mil.
The scheduled flight revenue improved as the number of passengers carried grew by 35% y-o-y to 1,216,943 passengers in the quarter under review.
“This was on the back of 29% increase in seat capacity from 1,209,416 seats in Q3 2015 to 1,560,780 seats in Q3 2016. The resultant load factor was an improvement of 3% from 75% load factor in Q3 2015 to 78% load factor in Q3 2016,” it said.
Average base fare also rose by 14% to RM501 in Q3 2016 on the back of healthy demand mainly from China and North Asia markets.
On the other hand, the group’s operating expenses increased by 13% y-o-y to RM934.1mil due mainly to a 60% jump in maintenance and overhaul expenses to RM158.3mil (as fleet size increased and the ringgit depreciated) and a 22% hike in aircraft operating lease expenses to RM222.2mil.
For the cumulative nine-month period, AAX turned in a net profit of RM191.53mil versus a net loss of RM547.05mil in the corresponding period last year.
In a press statement, AAX group chief executive officer Datuk Kamarudin Meranun said: “We are pleased that despite a weak travelling season and increased capacity, we managed to deliver a humble net profit which attests to the commercial viability of the long-haul low-cost model. However, much work still needs to be done and the team are focused and committed to ensure positive growth amid these challenging environment.”
He said Malaysia AirAsia X (MAAX) added great capacity in Q3 amounting to 10% out of the 32% planned for the whole year.
“This was to set the tone for future quarters especially the fourth quarter of 2016 and the first quarter of 2017, both historically strong quarters. Australia routes continue to be MAAX’s highest revenue contributor at 33% of total revenue, with 52% growth y-o-y due to higher passenger traffic as we increased our frequency into both Sydney and Gold Coast during the quarter under review followed by China sectors.”
Thailand AirAsia X recorded a strong 85% load factor, an increase of 14 percentage points y-o-y from 71% in the same period last year.
He said there were no new routes or frequencies added during the quarter as it was focusing on turning around its current routes.
Indonesia AirAsia X (IAAX), however, has been temporarily suspended, with the termination of Sydney and Melbourne services from Sept 1. The suspension of these services is part of a network restructuring aimed at improving operational efficiencies at IAAX before resuming operations again, according to him.
“We remain cautiously optimistic that we are on track to achieving our first full year profit since 2013, without neglecting to take necessary precautions on factors beyond our control such as currency volatility, regulatory uncertainty and other external factors which are expected to persist,” said Kamarudin.
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