AirAsia to expand fleet further as Q2 revenue hits record
KUALA LUMPUR (Reuters) – AirAsia Bhd said it would increase its fleet by 21 percent in the second half of the year, in one of the fastest pace of expansions for the Malaysian low-cost airline, after reporting record quarterly revenues on rising travel demand.
The group, which saw its second-quarter net profit crater mainly due to a one-off charge, said it planned to add 22 planes to its fleet – at 106 as of end-June – through a combination of finance and operating leases in the second half of 2017.
"This will be one of the fastest pace of expansions in the last few years, made possible due to the favorable competitive and operating environment of aviation in Asia," AirAsia said.
The airline said it was projected to achieve an average load factor – a measure of how full planes are – of 88 percent in the third quarter based on the existing forward booking trend.
"For the remaining quarters of 2017, we remain optimistic as we continue to observe strong demand across most sectors coupled with a stable fuel price and foreign exchange environment."
AirAsia reported a 73 percent yearon-year drop in its second-quarter net profit to 92.45 million ringgit ($21.67 million), including a one-off deferred tax charge that offset the impact of higher passenger numbers and load factor.
The profit, the smallest since the end of 2015, missed an estimate of 357.6 million ringgit from one analyst polled by Thomson Reuters. But the carrier's revenue hit an all-time high 2.38 billion ringgit, up from 1.62 billion ringgit a year ago.
The airline reported a 2 percentage point rise in load factor to 89 percent in the second quarter ended June. Total number of passengers carried rose 10 percent to 9.6 million, versus an 8 percent capacity increase.
AirAsia requested for a suspension in the trading of its shares at the midday break, "pending a material announcement."
Investors have been waiting to hear about the airline's planned sale of its aircraft leasing arm, Asia Aviation Capital, valued by analysts at around $900 million.
Group Chief Executive Tony Fernandes has said that an expected sale of a majority stake in its leasing unit to a South Korean group was "imminent," with no roadblocks to the transaction.
Privately-owned Korea Transportation Asset Management is said to be negotiating the final terms to acquire the leasing unit. Reuters first reported on the deal in March.