AirAsia’s passenger capacity sees strong growth in first quarter of financial year 2018
KUCHING: AirAsia Bhd’s ( AirAsia) consolidated air operating certificates ( AOC) for Malaysia, Indonesia and Philippines saw a strong growth in passenger capacity for its first quarter of financial year 2018 (FY18).
To note, its average seat per kilometre (ASK) came in at 17.6 per cent year over year (y-o-y) and 2.1 per cent quarter over quarter (q-o-q).
In a corporate update, MIDF Amanah Investment Bank Bhd (MIDF Research) said the increase in ASK exceeded its expectations by 10 per cent y-o-y.
The strong ASK growth was attributed to the addition of 17 new aircraft to AirAsia’s fleet, bringing its total fleet to 123 aircraft currently.
“In comparison to the last quarter, the number of aircraft under Air Asia’s AOC increased by seven. There were seven new routes introduced: four in the Philippines and three in Indonesia.
“Meanwhile, 16 routes saw an increased in frequencies: 13 in Malaysia and three in Indonesia,” the research arm said yesterday.
Despite the significant ASK expansion, AirAsia managed to maintain its 1QFY18 load factor at a healthy level of 87.5 per cent.
For the quarter, the airline’s consolidated ACO’s revenue passenger kilometre ( RPK) increased by 15.4 per cent y-o-y and 2.9 per cent q-o-q.
“We deem the quarterly growth as encouraging despite a seasonally stronger travel season in 4Q17 last year,” said MIDF Research.
Looking at its associates, the research arm of Public Investment Bank Bhd (PublicInvest Research) in a separate note saw that Thailand AirAsia’s ( TAA) performance remained strong with a reported load factor of 91 per cent on the back of passenger volume and ASK growing by 16.2 per cent y-o-y and 17,2 per cent y-o-y respectively.
For the first quarter, the Thai airline opened six new routes from Bangkok, Phuket and Chiang Mai while increasing flight frequencies on 11 routes from Bangkok and Pattaya.
Meanwhile, AirAsia India (AAI) saw more moderate performance with its fleet size increasing by two new aircraft; passengers carried growing by 3.7 per cent q-o-q; and passenger load declining by 2.4 per cent to 83 per cent.
For AirAsia Japan ( AAJ), PublicInvest Research reported that its passenger load showed quarterly improvements by 15 points to 79 per cent.
“Its passengers carried increased by 77.4 per cent q-o-q, exceeding its ASK growth of 40 per cent q-o-q.”
Lookingforward,MIDFResearch believed AirAsia’s ASK wouldl continue to pick up further in FY18 as it planned to add about nine more aircraft to its consolidated AOCs in 2018.
Overall, both analysts were impressed with the airline’s robust 1QFY18 operation results are expecting a stronger performance for the remainder of the year on the back of a continually growing ASK and expected better performances from AAI and AAJ.
MIDF Research maintained its ‘buy’ call on AirAsia with a target price (TP) of RM4.80 while PublicInvest Research reiterated its ‘outperform’ call on the stock with a TP of RM5.03 per share.