AirAsia's Profit Falls 56%
Wall Street Journal
By JASON NGKUALA LUMPUR—AirAsia Bhd., Southeast Asia's largest discount carrier by fleet size, reported a sharply lower profit in last year's final quarter, although analysts say falling fuel prices may help boost the airline's profitability this year.
Net profit for the three months through Dec. 31 dipped 56% from a year earlier to 135.7 million ringgit ($44.9 million), reflecting mainly higher aircraft-fuel expenses, the carrier said Wednesday. Revenue, however, rose 9.3% to 1.27 billion ringgit, driven by an increase in passengers and higher average fares.
"Based on the current forward booking trend, underlying passenger demand in the first quarter for the Malaysian, Thai and Indonesian operations remains positive," AirAsia said. "Passenger numbers are expected to remain strong for the rest of the quarter, in line with seasonal patterns," it added.
AirAsia is scheduled to take delivery of 20 new A320 Classic aircraft in 2012, and has firm orders with Airbus for 17 of the aircraft, Group Chief Executive Tony Fernandes said in a separate statement. "We also look forward to the listing of AirAsia Thailand and AirAsia Indonesia this year," he said.
The company's 2011 profit fell 47% to 564.1 million ringgit, but revenue climbed 13% to 4.47 billion ringgit. Average fuel prices rose 36% to $131 per barrel.
The airline carried about 18 million passengers, a 12% increase from a year earlier, while its load factor—the proportion of seats filled on flights—rose two percentage points to 80%. Revenue-passenger kilometers, a measure of the volume of passengers carried, rose 14%.
"The results were below our expectation," said MIDF Investment Bank analyst Chua Boon Kian, who had forecast a net profit of 638.6 million ringgit for 2011.
In August, the major shareholders of Malaysian Airline System Bhd. and AirAsia agreed to swap shares in a bid to lower competition and cut costs. Under the collaborative agreement, the airlines aim to realize savings and increase revenue from aircraft purchasing, engineering, ground-support services, cargo services, catering and training.