AirAsia Posts Third Straight Profit Gain on Budget Travel Demand
Net income increased 3.6 percent to 157.8 million ringgit ($52 million) in the three months ended Sept. 30 from 152.3 million ringgit a year earlier, the Sepang, Malaysia-based carrier said in a statement yesterday. Revenue rose 15 percent to 1.24 billion ringgit.
The airline’s main Malaysian unit carried 9 percent more passengers and expanded capacity 10 percent as the region’s economic growth spurred travel demand. AirAsia group will take delivery of 11 more Airbus SAS A320s this quarter, it said.
“They are putting a lot of capacity into their fleet,” said Ahmad Maghfur Usman, an analyst at OSK Holdings Bhd. in Kuala Lumpur. “That shows they are expecting demand to grow despite new competition in the market.”
Shares of AirAsia fell 0.4 percent to 2.85 ringgit in Kuala Lumpur yesterday before the earnings were released. The stock has fallen 24 percent this year, compared with a 6 percent advance in the benchmark FTSE Bursa Malaysia KLCI Index.
Net operating profit in the quarter rose 18 percent to 205 million ringgit, the carrier said. The company had additional deferred tax charge of 96.9 million ringgit in the period.
AirAsia is facing more competition in its home market with Indonesia’s PT Lion Mentari Airlines set to start low-cost flights in Malaysia next year. Asia’s total air-travel may expand 6.4 percent a year through 2031 because of economic growth, according to Boeing Co.
“We will continue to launch more routes and add more frequencies to cater to the high demand,” AirAsia Chief Executive Officer Aireen Omar said in a separate statement.
The group, which currently has a fleet of 112 A320s, plans to take delivery of 266 more planes by 2026. AirAsia said it’s also in talks to purchase 100 more aircraft to support the growth in Asia.
AirAsia will hedge fuel prices at the “opportune” time, Aireen said. Jet kerosene prices averaged $126.43 a barrel in Singapore trading in the period, compared with $125.76 a year earlier, according to data compiled by Bloomberg.
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