AirAsia’s first quarter earnings down 30%

PETALING JAYA: AirAsia Bhd saw its net profit in the first quarter (Q1) ended March 31, 2017 drop 30% to RM615.81 million, from RM877.8 million in the previous corresponding quarter, mainly due to higher expenses, staff costs, lower share of results from associates and joint ventures, and foreign exchange gains.

In a statement yesterday, the low-cost carrier said its share of results of associates declined 58% year-on-year to RM34 million as Thai AirAsia posted smaller profits due to weakness in the China-Thailand travel market.

The group’s net operating profit declined 33% to RM267.1 million in Q1 2017, from RM401 million previously, mainly due to increase in average fuel price and a strong US dollar currency during the quarter.

Revenue grew 31% to RM2.2 billion, compared with RM1.7 billion in the same period last year, driven by increase in total passengers carried and a strong seat load factor.

AirAsia announced a final dividend of 12 sen per share for the financial year 2016, which would be paid to shareholders on June 23, 2017.

“AirAsia Group load factor was up four points to 89% in 1Q17. Our operations in Malaysia, Thailand, Indonesia and Philippines all reported higher load factors in the first quarter of 2017. This was in line with our focus on increasing revenue per flight across our network,” its group CEO Tony Fernandes said.

On prospects, the group said it is projected to achieve an average forecast load factor of 91% in the second quarter of 2017 based on the existing forward booking trend.

It said the strong demand is expected to derive from the festive Hari Raya season, in conjunction with the midterm school holidays in India as well as the expanded Korean and China network from Philippine.

The group said it is planning to increase an additional 29 planes through a combination of finance and operating lease this year.

For the remaining quarters of 2017, the group said it remained optimistic as it continues to observe strong demand across most sectors coupled with a favorable fuel price and foreign exchange environment.

“The board remains positive for the prospects of the group in 2017 and is optimistic that the 2017 results may surpass that of 2016,” it added.