AirAsia profit down on higher costs, weak ringgit

KUALA LUMPUR, Malaysia – Malaysia-based budget carrier AirAsia has seen its second-quarter net profit fall mainly due to the weakening ringgit and higher costs.

The region’s biggest low-cost airline by fleet size said in a statement on Thursday, August 20 its second quarter net profit was MYR243 million ($58.30 million), down by 33.8% year-on year.

The carrier posted a net profit of MYR367.2 million ($88.10 million) in the same period last year.

Its revenue remained mostly flat, rising 1% to MYR1.32 billion ($316.81 million) from MYR1.31 billion ($314.31 million) during the same period last year.

Good year end

AirAsia is led by flamboyant boss Tony Fernandes, a former record industry executive who acquired the then-failing airline in 2001.

It has seen spectacular success and aggressive growth under his low-cost, low-overhead model.

Fernandes said he expected Malaysian operations to benefit from higher demand from Chinese passengers, as well as gaining an advantage with some competitors withdrawing routes that AirAsia operates in.

“Starting middle of August, there has been substantial capacity reduction and route cancellations by other players on the routes that AirAsia operates in,” he said.

“Demand from Chinese travelers has also recovered starting from May 2015 onwards and with fuel trending favorably for airlines, the stage is set for a good year end for the company.”

Loss-making AirAsia X, the long-haul arm of AirAsia, posted on Wednesday a net loss of MYR132.94 million ($31.92 million).

During the same period last year, it posted a net loss of MYR128.79 million ($30.90 million). – Rappler.com

MYR1 = $0.24