AirAsia X’s profit hit by higher fuel expenses

AirAsia X Bhd’s (AAX) income for the first quarter (Q1) ended March thirty-one, 2017, was dragged down by higher expenses such as aircraft fuel cost, which ballooned by 54% from the year earlier.

AAX, whose expenses are generally denominated in the usa dollar, said it posted a 43% year-on-year drop in operating profit to RM60. 3mil mainly due to an overall 6% depreciation of the ringgit contrary to the greenback.

The long-haul, low-cost air travel told Bursa Malaysia on Tuesday that net profit fell to RM10. 34mil from RM179. 49mil previously.

Aircraft fuel expenses, the single greatest operating cost, swelled to RM377. 69mil from RM243. 06mil a year earlier. Aircraft operating lease costs rose to RM70. 82mil from RM45. 64mil previously.

Its profit got a hit despite a healthy growth in people carried – up 33% to 1. 4 million in Q1 on the back of a higher available seat capacity – that led to a 22% begin earnings year-on-year to RM1. 18bil.

Load factors were 2 schedule points higher at 84% compared with the same quarter in 2016.

Additional revenue per passenger remained frequent at RM150 while freight and cargo revenue grew by 5. 9% to RM32. 8mil in the quarter under review.

Revenue per available chair kilometer (RASK) was down 6% year-on-year from 12-15. 11 sen to 16. 20 sen throughout the quarter under review.

AAX said the marginal drop was due to the expected embrace capacity on primary existing routes as per its technique to grow market share and therefore pressuring yields.

In a press statement, it said Malaysia AirAsia X (MAAX) authorized a wholesome load factor of 84%, up 2 percent points (ppts).

Thailand AirAsia X outperformed despite regulatory constraints by posting US$5. 5mil net profit in Q1. It recorded a strong 94% load factor, an increase of 5 ppts from 89% in the same period final year.

As for Philippines AirAsia X, the A330s service was still briefly suspended in Q1 as part of a community restructuring aimed at enhancing operational efficiencies. However, it has resumed the A330 functions with the introduction of two new routes this month.

On the prospects, the AirAsia group affiliate said that dependent on the current ahead booking trend, forward lots and average fares were trending better than the previous year.

However, it added, the relative some weakness of the Malaysian ringgit remained an important concern as a big percentage of the company’s borrowings and operating costs – including fuel costs and aircraft operating lease contract exprnses – are denominated in US dollars.

“Barring any unforeseen circumstances, including but not limited to terrorist attacks, natural disasters, epidemics, economical downturn, energy price hike and fluctuation in foreign currencies against the Malaysian ringgit, the company expects its leads to remain positive, inch it said.

In the press statement, MAAX chief executive officer Benyamin Ismail said: Moving forward for the remainder 2017, AirAsia X will concentrate on strengthening our market leadership through a amount of strategies.”

We hope to stretch our aircraft utilisation rate further with more incremental frequencies on high yield point-to-point paths and new routes in the second half of 2017. We now have also arranged targets in ensuring the company remains lean through various cost initiatives and maximise the operational groupe between AirAsia and AirAsia X.