Forex Loss & High Fuel Cost Dampen AirAsia's Financial Result

[Naim 6]

August 28, 2008 20:39 PM

 

Forex Loss & High Fuel Cost Dampen AirAsia's Financial Result

 

KUALA LUMPUR, Aug 28 (Bernama) -- Low cost carrier, AirAsia Bhd's financial result for the first half year ended June 30,2008 was dampened by a RM77 million translation loss amid the weakening ringgit and high fuel cost.

 

The company said its pre-tax profit for the six months narrowed to RM63.273 million when compared with the RM173.805 million registered for the first half of 2007.

 

AirAsia's second quarter financial result slipped into the red as it posted a pre-tax loss of RM46.901 million compared with a pre-tax profit of RM130.365 million for the same quarter last year, it said in a filing to Bursa Malaysia.

 

The groups turnover for six months ended June 30, 2008 however rose to RM1.143 billion from RM828.333 million registered previously.

 

The positive growth in revenue was attributed to higher passenger volume achieved and contribution from ancillary income.

 

"Ancillary income delivered a stellar performance with 60 percent growth against the same period last year. The checked baggage fee introduced in the quarter helped recover some impact of the higher fuel prices without undermining passenger demand," AirAsia said.

 

Passenger volume grew by 20 percent in the second quarter of 2008 when compared with the same period of 2007. The average fare was higher by 16 percent at RM198 when compared to the RM170 achieved in the second quarter last year.

 

The higher average fare reflects the robust demand for services and the maturity of certain routes in the network, said AirAsia.

 

Load factor was 4.4 percentage points lower at 76 percent as a consequence of significant capacity addition and the initial underperformance of new routes.

 

The Thai operation endured a challenging period due to escalating domestic political uncertainty, AirAsia highlighted.

 

"This situation led to many people holding back on their travel plans and prohibited our ability to achieve high load factors and yields. These are short-term challenges with the long-term picture remaining bright," AirAsia added.

 

AirAsia also pointed out that its Indonesian route network reorganisation produced positive outcomes with greater passenger flow and substantially higher yields.

 

However, the fuel cost rise impacted the Indonesian operations severely because it was undertaken using Boeing 737-300 aircraft.

 

According to AirAsia, Indonesia will receive its first Airbus A320 aircraft on Sept 19. It will help reduce operational cost and enhance efficiency.

 

Going forward, AirAsia said although the third quarter was traditionally the weakest, the impact of lower jet fuel prices, together with the continued strong demand for services, is expected to augur well for the group.

 

-- BERNAMA

 

http://bernama.com/bernama/v3/news_lite.php?id=355882

[Sri Ramani K. 0]

bonus also postponed to 18 months... :angry:

[Ashmil Abd Ghani 0]

"Ancillary income delivered a stellar performance with 60 percent growth against the same period last year. The checked baggage fee introduced in the quarter helped recover some impact of the higher fuel prices without undermining passenger demand," AirAsia said.

 

I just wounder how much AirAsia Group generate income from this fee??