2014 Q1 Financial Results for Malaysia Airlines & Air Asia Group

[flee 5]

Malaysian Airlines earnings set to show financial burden of loss of MH370

 

SINGAPORE, May 15 (Reuters) - Malaysian Airlines will report first-quarter earnings later on Thursday that are set to provide confirmation of just how badly the already loss-making carrier's finances have been hit by the vanishing of flight MH370 on March 8.

Struggling for years to cope with high costs and nimbler regional and international rivals, Malaysian Airline Systems Bhd's quarterly performance has been made so uncertain by reduced traffic and potential costs linked to the jet's unexplained disappearance that analysts say they simply can't issue January-March estimates.

The carrier known as MAS reported a net loss of 343 million Malaysian ringgit ($106 million) for the last quarter of 2013, squeezed between AirAsia Bhd on short-haul routes, and Gulf carriers and AirAsia X in the medium and long-haul market. The first-quarter numbers are expected after the close of trading on the Malaysian stock exchange on Thursday.

Its worst quarter on record was in October-December 2011, when a series of one-off provisions related to jet deliveries and maintenance pushed it to a 1.28 billion ringgit net loss.

The airline said last month that passenger numbers dropped sharply after MH370's disappearance, its load factor - or percentage of seats sold - slipping to 74.1 percent, close to January 2013's record monthly low of 73.9 percent. Analysts expect the uncertainty over MH370 to continue to deter travellers from using the airline, 69 percent-owned by Malaysian state investor Khazanah.

"If there is new political will to restructure, MAS can be saved from itself, and our forecasts, target price, and perhaps even our recommendation may be raised," CIMB said in a report this week. But the brokerage, which has a 'reduce' rating on the shares, said the path forward remains risky.

Analysts have long urged change at the carrier. As part of a strategic overhaul of the company, MAS is looking to sell a stake in its profitable aircraft maintenance unit, sources told Reuters this week.

UNCERTAIN TIMES

Regular customers like Ray Tan highlight the problem facing MAS. For the past two years, the Singapore-based technology executive flew MAS for business trips to Kuala Lumpur every fortnight.

Since flight MH370 disappeared, though, he has shunned the airline.

"If it's just the incident alone, I would think it's an isolated one, but right after it, there were a couple more breakdowns with the planes and that kind of really eroded confidence I had for MAS," said the 31-year-old, who won't even take the airline for leisure now.

Since last year, MAS has adopted a strategy of lowering fares to try and bolster traffic. Yet hampered by a strong trade union, it has also been unable to slash costs and improve productivity.

Analysts have argued that bringing in private investment and reducing the role of state investor Khazanah might promote change at the airline, improving competitiveness.

That prospect appears remote. Khazanah attempted to cut its stake in MAS in 2012, but the airline's main union successfully blocked a share swap deal with AirAsia that would have brought in a profitable airline with experience of competing aggressively.

"Their operating costs are still so high, they need to relook at the business model," said Kuala Lumpur-based Ang Kok Heng, chief investment officer at Phillip Capital. "Whatever restructuring they go through, they will have to overcome union opposition which is very difficult to do."

With no near-term improvement seen, investors including Khazanah may see the value of their holdings further eroded.

Since MH370 disappeared, MAS shares have slumped as much as 20 percent. Its market value has tumbled about 80 percent over the past five years, while the broader Malaysian market has risen about 80 percent.

($1 = 3.2385 Malaysian Ringgits) (Additional reporting by Al-Zaquan Amer Hamzah in KUALA LUMPUR; Editing by Rachel Armstrong and Kenneth Maxwell)

Source: http://www.reuters.com/article/2014/05/14/malay-airline-results-idUSL3N0O010D20140514

 

[Mohd Suhaimi Fariz 2]

I wonder how Ray Tan feels about flying on SQ, considering they've been beset by many problems on their A380 this year

 

Anyways my bet for the financial results is that, while it's not going to be very good, it's not going to be as bad as the Q4 2011 loss.

[leon t 0]

MAS have already lost a few hundred million in the last quarter even before MH370 incident - and hence its 1st quarter result will be a bigger loss in addition to MH370 incident - would guess its losses would be anywhere from rm350 million to rm450 million

[JuliusWong 0]

I think AirAsia Group will also report weak profit as well since region is experiencing high level of overcapacity.

[flee 5]

I think AirAsia Group will also report weak profit as well since region is experiencing high level of overcapacity.

But Airasia's operating statistics are good - load factors are holding up. However, yields may still be lower than they want (like in 2013 Q4). But with Thailand and Indonesia no longer making loses, they can cope better with the low yield.

 

However, then Airasia India starts up in 2H 2014, they will be making losses - so it will be a challenging 2014 for them.

[flee 5]

Malaysia Airlines Q1 net loss - RM443.4m

 

Bursa Malaysia Filing: http://announcements.bursamalaysia.com/EDMS/edmsweb.nsf/all/FBA45E68075347B448257CD90032B08A/$File/MAS%20Q12014.pdf

 

 

 

REVIEW OF PERFORMANCE

The tragic MH370 incident on 8 March 2014 had a dramatic impact on the traditionally weak first quarter performance. The incident, involving the disappearance of the B777 Beijing-bound flight, triggered a major short term reaction in consumer behavior, with the airline observing high cancellation of existing bookings and reduction in long haul bookings in favour of short haul bookings.

The timing of MH370 also coincided with the start of the March MATTA sales fair which severely impacted the volume of forward sales that are typically made at this time.

Consequently, despite the increase in capacity by 19% compared to the same quarter last year, operating revenue increased by only 4%. Seat Factor remained at a respectable 76% even though the competitive environment both domestically and internationally continued to intensify.

Yield in the quarter continued to be under pressure as a result of competition and the weakened consumer demand. Yield decreased by 9% compared to the same quarter last year.

Operating expenditure increased by 6% mainly due to an increase in fuel cost by 14%, contributed by the increase in capacity and the weakening of the Ringgit against US Dollar. However, there was significant savings in leasing costs generated from the fleet renewal programme and on maintenance costs

The Group registered a negative EBITDA of RM101.2 million this quarter compared to a positive EBITDA of RM30.2m in the same quarter last year.

After accounting for depreciation, amortisation and impairment of RM236.3 million (2013: RM195.5 million), unrealised foreign exchange gain of RM0.9 million (2013: RM21.3 million loss), finance costs of RM121.9 million (2013: RM99.3 million) and fair value change of derivative of RM11.6 million gain (2013: RM4.3 million gain), the Group registered a loss after tax of RM443.4 million for the first quarter ended 31 March 2014 compared to a loss of RM278.8 million in the same quarter last year.

The Group cash balance as at the end of the quarter was RM3.4 billion.

Edited May 15, 2014 by flee

[KK Lee 5]

Malaysia Airlines Q1 net loss - RM443.4m

 

The Group cash balance as at the end of the quarter was RM3.4 billion.

 

With this cash, may be mh could acquire another airline.

[flee 5]

Malaysia Airlines 1Q loss widens. Capacity growth to be adjusted, followed by restructuring

 

Malaysia Airlines (MAS) is adjusting capacity growth rates for the remainder of 2014 and preparing another potential restructuring. The capacity adjustments, which will result in ASK growth of 10% to 12% for 2014 compared with an initial plan for 19% growth, follow the carrier’s fifth consecutive quarter of losses.

The MH370 incident has impacted MAS, particularly bookings from China. But the upcoming changes were required regardless and are as much a response to challenging market conditions.

The outlook for the rest of 2014 and beyond is bleak, necessitating a thorough review. As is always the case with MAS restructurings, the outcome will largely hinge on how deep the MAS executive team is allowed by the government to restructure.

MAS loss widens by 59% in 1Q2014

MAS reported on 15-May-2014 a net loss of MYR443 million (USD134 million) for 1Q2014 compared with a net loss of MYR279 million (USD90 million) for 1Q2013. Revenues were up only 2% (including a 6% increase in passenger revenues) despite an 18% increase in RPKs as passenger yields dropped by 9%. ASKs were up 19% as load factor dropped 0.2ppts to 76.4%

MH370, a 777 flight from Kuala Lumpur to Beijing which disappeared on 8-Mar-2014 and has not yet been found, contributed to the poor 1Q2014 result. Insurance is covering the loss and all related charges, including hotel rooms for family members. But both existing and advanced bookings were impacted.

Out of respect for the families, MAS also immediately withdrew from marketing activities, including participation in a Malaysian travel fair which typically generates “significant and vital ticket sales”. The carrier says it was only 4% short of its sales target for 1Q2014 prior to 8-Mar-2014 and was on track to make up the shortfall at the fair.

But the 1Q is typically a seasonally weak period for MAS and the carrier would have incurred a significant loss regardless of MH370 as its yields were already tracking down on a year-over-year basis amid intense competition. MH370 exacerbated an already tough situation and makes it even more challenging for MAS to turn around without major changes.

MAS was already on a highly unprofitable path before MH370

MAS says that due to MH370 its goal of returning to profitability by the end of 2014 is now questionable. But the reality is the carrier would have struggled to meet this goal. Market conditions were already challenging and MAS’ losses were already mounting.

The 1Q2014 loss marked the fifth consecutive quarter in the red for MAS, which had been profitable in 3Q2012 and 4Q2012 in what was seen at the time as an indication that a restructuring plan initially implemented in late 2011 and early 2012 was bearing fruit. But 2013 proved to be a challenging year with net losses and declines in EBITDA every quarter. MAS ended 2013 with a net loss of MYR1.174 billion (USD372 million) as yields dropped 13% and passenger revenues were up only 9% despite a 27% spike in RPKs.

4Q2013 was particularly challenging with a MYR343 million (USD106 million) loss in a typically strong period and yields dropping 16%. Yields have been steadily on the decline since 2Q2013, when MAS started pursuing ambitious capacity expansion and implemented an aggressive pricing strategy in an attempt to boost load factors.

The initiative led to some of the fastest passenger growth rates and highest load factors in the Asian full-service airline sector, with MAS passenger numbers up 29% in 2013 and another 21% in 1Q2014. But well before MH370 it was becoming clear the carrier’s strategy was not likely sustainable. As CAPA reported in Nov-2013:

Over the past year MAS has grown passenger traffic at record levels. … But MAS still has a long road ahead and challenges to overcome. Competition is intense and market conditions are not improving. Its pricing strategy is not sustainable and will only succeed if passengers are ultimately prepared to pay more to fly with MAS.

The carrier has shiny new aircraft, membership in a global alliance, an improved service, a bigger network and a more efficient hub. Now MAS has to execute the most difficult part of its strategy and turn all of those investments into higher yields and long-term profitability.

MAS reduces capacity projections for 2014

MAS is now closely reviewing its schedule and market conditions in order to better align capacity with demand. The carrier was initially projecting a 19% increase in ASKs for the full year 2014, matching the increase from 1Q2014. MAS management is still in the process of preparing an adjusted capacity plan for 2014, which it expects to complete within the next few weeks, but anticipates the carrier will now end the year with ASK growth of 10% to 12%.

In light of the current market conditions a deeper cut would be ideal. But this is very difficult to achieve because virtually all the ASKs being added in 2014 are driven by capacity (and aircraft) that were added in late 2013. On a month by month basis, MAS ASKs are not likely to go above the 5.4 to 5.5 billion mark, which is the level the carrier was at in Dec-2013 and again in Jan-2014 and Mar-2014 (February was lower as it is a shorter month). In fact it will likely come down slightly from this level as some frequencies are cut.

MAS is taking delivery of 20 aircraft in 2014, including 12 at the main airline and eight at regional subsidiaries Firefly and MASWings. But on a net basis its fleet will remain flat when taking into account retirements. (Five of the 12 mainline aircraft, four 737-800s and one A330, were delivered in 1Q2014 with 11 737-800s and one A330 to be delivered over the remaining three quarters.)

MAS will not defer any deliveries, still hopes to place new orders this year

Full analysis: http://centreforaviation.com/analysis/malaysia-airlines-1q-loss-widens-capacity-growth-to-be-adjusted-followed-by-restructuring-168388

 

[flee 5]

Malaysia Airlines, Whose Flight 370 Vanished in March, Grapples With Financial Difficulties For carrier, tragedy's collateral effect has been to worsen finances that were already precarious, pressured by a wave of low-cost competition.

 

See: https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=3&cad=rja&uact=8&ved=0CDcQFjAC&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB10001424052702303663604579501774243050330.html&ei=0ax1U5b2GcrGuASZjYGQBQ&usg=AFQjCNGBFDEdyk9ij9HMLxKKVgnBCPqa0g&bvm=bv.66699033,d.c2E

Edited May 16, 2014 by flee

[flee 5]

 

Airasia X racks up RM 48.1 loss before tax for Q1 2014

 

http://www.bursamalaysia.com/market/listed-companies/company-announcements/1625833

 

 

[flee 5]

Source: http://www.thestar.com.my/Business/Business-News/2014/05/19/Q1-revenue-up-40pc-but-AirAsia-X-records-RM11pt3mil-in-losses/

KUALA LUMPUR: AirAsia X Bhd saw its revenue for the first quarter ended march 31, 2014 jump 40% year-on-year to RM749.5mil from RM535mil, but recorded losses of RM11.3mil.

This contrasted starkly to the corresponding quarter a year earlier, when earnings were RM50.2mil.

According to AirAsia X, although it enjoyed improved revenue from a significant increase in capacity, it suffered steeper staff costs, aircraft fuel expenses, lease expenses and foreign exchange losses.

The company’s loss before tax in the quarter came to RM48.1mil compared to a PBT of RM34.8mil previously. However, it enjoyed a net tax allowance of RM36.8mil versus RM15.4mil previously, which translated to the reduced losses of RM11.3mil.

AirAsia X remains positive on its prospects for the year, saying it had embarked on a major capacity expansion phase with new aircraft deliveries added to its fleet, with ASK (available seat kilometre) capacity expected to grow above 30% year-on-year from Q3 of 2013 to Q3 of 2014.

“We expect short-terms earnings pressure during this period from lower yields contributed by a higher portion of promotional fares used to stimulate new demand creation to fill up the new capacity. Our experience suggests that new capacity typically takes about 12 months to break-even.

“We believe the additional capacity will generate a stronger market share and route network, and deliver long-term benefits from scale advantages relative to our competition,” the company said.

[flee 5]

AirAsia X Shares Actively Traded In Early Session

KUALA LUMPUR, May 20 (Bernama) -- Long-haul budget carrier AirAsia X Bhd emerged as one of the active counters in early trade after the airline announced its first quarter financial results Monday.

At 10.26 am, AirAsia X rose 6.5 sen to 82 sen, with 19.86 million shares changing hands.

Alliance Research has maintained its 'hold' rating on AirAsia X in light of the negative earnings momentum despite the possibility that the airline could benefit from a potential restructuring of Malaysia Airlines (MAS).

"We have slashed our financial year 2014 until 2016 earnings forecasts. We expect losses in financial year 2014, and have cut financial years 2015 and 2016 earnings estimates by 95 per cent/41 per cent as we incorporate lower available seat kilometres forecasts and yields," it said.

The research firm also does not expect the MH370 incident to have a lasting impact on passenger demand on AirAsia X's Chinese routes.

AirAsia X had seen demand for its Chinese routes fall by 10 per cent in the immediate four weeks after the tragic incident.

The airline suffered a pre-tax loss of RM48.13 million in its first quarter ended March 31, 2014 from a pre-tax profit of RM34.77 million on higher operating expenses in the quarter.

Revenue for the quarter was higher at RM749.48 million versus RM535.28 million in the same period a year ago, driven by an increase in seat capacity, as more aircraft were added for new routes and additional frequencies.

RHB Research said the commencement of the new klia2 budget terminal should allow the airline to improve its yields by attracting more premium passengers as well as improve costs on reduced fuel burn due to improved flight operations.

"The second quarter is typically the weakest quarter for carriers and we expect AirAsia X to remain in the red in the first half with the second half posting stronger earnings recovery on seasonality," it said in a note Tuesday.

[JuliusWong 0]

Q1 seems to the weakest for all airlines. Has AirAsia released their result?

 

I wonder if Thai AirAsia X is still going ahead with their launching now that the country is in martial law again......

[Isaac 0]

Woah! AAX share price is up 11% today despite the RM11.3 million loss in Q1 2014. Congrats to all AAX shareholders

[flee 5]

Q1 seems to the weakest for all airlines. Has AirAsia released their result?

Yes, out yesterday - plz click on the link in post #10.

 

In addition, here is the press release and slide presentation:

 

http://airasiax.listedcompany.com/newsroom/PressReleases_20140519.pdf

 

http://airasiax.listedcompany.com/misc/qr/presentation_slide_1Q2014.pdf

[flee 5]

 

Airasia's profit before tax for Q1 2014 little changed at RM 133.8m

See Bursa Malaysia filing here: http://announcements.bursamalaysia.com/EDMS/edmsweb.nsf/all/87FB71FBC952546248257CDE003A5ABD/$File/AirAsia_Bursa%20Announcement%20-%20Q1%202014.pdf

Commentary on prospects

The Group will take delivery of nine A320 aircraft in the second quarter of the year, all of which will be deployed in Malaysia. During the same period six older aircraft will be disposed and one aircraft leased to a third party, so that there will be a net increase of two aircraft in the Malaysian fleet.

In Malaysia, forward loads for the remaining months of the second quarter of 2014 are slightly lower than in the prior year with base fares higher than the prior year. In the full quarter passenger numbers and fares are expected to be broadly in line with the previous year, reflecting better price discipline in the market.

In Thailand forward loads for the remaining months of the second quarter of 2014 are lower than the prior year with average fares also lower than the prior year, a reflection of the current political unrest in the country. TAA will continue to focus on domestic, southern China and Indo-China routes in the remaining quarters of 2014.

Indonesia AirAsia will maintain fleet size in the second quarter with no additional aircraft, thereby reducing the rate of capacity growth. The upcoming presidential election in July is not expected to have any negative impact on the Indonesian economy, while the recent strengthening of the Rupiah is expected to continue. During the second quarter Indonesia AirAsia will increase frequency on several routes including Jakarta to Surabaya and Bandung to Kuala Lumpur, Pekanbaru, and Surabaya. Forward loads in Indonesia are lower than in the prior year for the remaining months of the second quarter, though average fares are siginifcantly higher.

In the Philippines, forward loads for the remaining months of the second quarter 2014 are slightly higher than in the prior year with based fares in the months of May and June 2014 higher than in the previous year. Tourist arrivals in the Philippines continue to post remarkable growth which augurs well for AirAsia and the aviation industry.

The outlook for the second quarter of 2014 should be seen in the context of the current prices of oil and aviation fuel while the operating environment in both Indonesia and the Philippines remains challenging. However, barring any unforeseen circumstances, the Directors remain positive for the prospects of the Group for the second quarter of 2014 and the remainder of the year.

[flee 5]

AirAsia Q1 revenue unchanged from last year, but profit up 33%

AirAsia Berhad today reported revenue of RM1.3 billion for the quarter ended 31 March 2014, unchanged from the revenue reported in the same quarter last year.

The revenue recorded was on the back of the high number of passengers carried which grew 4% year-on-year to 5.37 million.

Seat load factor stood strong and saw an increase of 2 percentage points to 81%.

During the quarter under review, AirAsia recorded an 11% decline in operating profit to RM223.85 million, mainly due to lower fares. The fall in average fare to stimulate the market was offset by the high increase in ancillary income.

EBIT margin however, remained at a strong level of 17%.

Profit after tax was reported at RM139.72 million, up 33% mainly due to foreign exchange gain on borrowings.

AirAsia Berhad CEO, Aireen Omar noted in a press release announcing the results, “AirAsia continues to be disciplined in an industry where irrational competition exists. We are focussed on running a lean operation, adding capacity where needed and cutting routes and frequencies where applicable to ensure better profitability.

"These allowed us to maintain low Cost per Available Seat Kilometre (CASK) at 13.58 sen, slightly down from the 13.63 sen recorded the same quarter last year.”

The Company’s revenue, measured in terms of Revenue per Available Seat Kilometre (RASK), was reported at 16.39 sen, a slight decline of 3%.

Aireen said, “Despite the RASK pressure we have been seeing throughout the industry in the last few quarters, we are seeing signs of improvement with the narrowing decline of 3% as compared to the 10% decline in the last quarter. Average fare is moving upwards at RM164 as compared to RM158 last quarter, which is a very good sign."

Aireen added, “Besides that, we continue to ensure that our cash position remains strong. At the end of the reporting period, the company had RM1.3 billion in deposits, bank and cash balances and we continue to manage our net gearing level which stood at 1.83 times as at 31 March 2014.”

Thai AirAsia posted strong revenue of baht6.5 billion (RM643 million), up 7% from the same period last year. Operating profit was down by 65% to baht330.15 million (RM32.6 million) which led to a 67% decrease in profit after tax at baht244.66 (RM24 million).

Thai AirAsia’s CEO, Tassapon Bijleveld said, “Our decline in operating profit was mainly due to depreciation cost of taking aircraft into our balance sheet and spending on public relations and marketing, as the political demonstration in Bangkok continues into the first quarter of this year.

"With the political demonstration, TAA still recorded a solid 80% load factor."

Indonesia AirAsia (IAA) posted an increase of 13% in revenue to rupiah1,381 billion (RM386 million), from rupiah1,222.48 billion (RM342 million) last year. IAA posted an operating loss of rupiah390.38 billion (RM109 million), from an operating profit of rupiah41.97 billion (RM11 million) last year. IAA’s Q1 loss after tax was rupiah454.26 billion (RM127 million)– down from a profit after tax of IDR1.36 billion last year.

IAA’s CEO, Dharmadi said “The decline in operating profit was mainly driven by the weakening of the Rupiah and pushing up dollar-denominated costs such as fuel, maintenance and its lease expense."

Philippines’ AirAsia’s (PAA) operations are now fully integrated with AirAsia Zest (formerly known as Zest Air, prior to the acquisition by PAA).

Joy Caneba, PAA’s CEO said, “The AirAsia brand is starting to become one of the preferred brands when it comes to air travel here in the Philippines. In Q1 we carried 0.89 million passengers, which grew 520% from just 0.14 million passengers we carried in the same quarter last year.”

AirAsia’s Group CEO, Tony Fernandes said, "The Group has started out the year well, taking into account unavoidable external factors like the weakening of the local currencies against USD. Cost leadership is our best strength and the Group will continue to be focused on driving cost down through this challenging environment.”

He added, "Our ancillary business is growing at a very good rate. The ancillary performance this quarter (RM46 per passenger) is testament to my commitment and target of achieving RM50 ancillary income per passenger in the short-term.

"A lot of things are in the pipeline, including the increase in Fly-Thru pairings which we said will start happening after the move to klia2.

"I am also excited about the duty-free business which is starting to shape up very well with the new team on board; and the upcoming wifi onboard which is at its final stage of testing. An express lane will also be introduced soon at klia2.”

Tony spoke, “my key focus is to turnaround our Indonesia and Philippines operations, which I strongly believe will return to the black in the second half of 2014. This can be done with the rationalisation of many routes and further cost reduction.

"In the Philippines, we will see fares rising as the brand gets stronger, and with the reinstatement of category 1 which will allow us to add frequencies to Korea and introduce new routes to Japan.”.

Tony added, “I am also very excited that AirAsia India has been granted its Air Operating Permit (AOP) by the Directorate General of Civil Aviation, Government of India on 8th of May. Mittu (CEO of AirAsia India) and team have been working hard and is set to announce its first line up of domestic routes in the coming weeks.” – May 20, 2014.

Source: http://www.themalaysianinsider.com/business/article/airasia-q1-revenue-unchanged-from-last-year-but-profit-up-33

[flee 5]

Airasia Q1 results press release:

http://www.airasia.com/docs/common-docs/investor-relations/aa_1q14_press_release.pdf

 

[flee 5]

AirAsia further slows fleet expansion as 1Q profit falls - with the potential to accelerate later

Short-haul LCC group AirAsia has reported a sharp drop in profits for 1Q2014, including for its original subsidiary in Malaysia. Long-haul sister group AirAsia X meanwhile swung to a loss in 1Q2014 despite strong traffic growth and load factor improvement as yields in the Malaysian market deteriorated.

AirAsia has made another downward adjustment to its fleet plan, removing six aircraft from its 2014 fleet plan through aircraft sales. This brings the total reductions for 2014 to 19 aircraft when including the six sales and seven deferrals announced in Feb-2014. The group also expects to defer another seven aircraft in 2015, adding to the 12 deferrals announced earlier and leaving it with a mere 10 deliveries next year.

The new adjustments, which also include deferrals for 2016 to 2018, are understandable given the challenging market conditions. But they may prove to be a step too far, particularly if the pending restructuring at Malaysia Airlines (MAS) proves to be significant, providing AirAsia an opportunity to accelerate growth and improve yields in its home market.

Full analysis: http://centreforaviation.com/analysis/airasia-further-slows-fleet-expansion-as-1q-profit-falls---with-the-potential-to-accelerate-later-169347

[JuliusWong 0]

AirAsia Zest oddballs might be first to leave as well as AF* series....9M-AHI is now leased out to Czech Airlines as OK-NES for the northern hemisphere summer.

[flee 5]

AirAsia CEO Fernandes says aims for 85 percent load factor in two years

 

AirAsia Bhd (AIRA.KL), Southeast Asia's biggest budget airline, aims to increase its load factor to 85 percent in the next two years, its chief executive said on Thursday.

Following years of expansion and franchising, the airline is rationalising its fleet through aircraft sales after a slowdown in Indonesia and delays in its entry into India.

"My goal would be to try to move to 85 percent" from the current 81 percent seat-load factor," Tony Fernandes told Reuters in an interview at the sidelines of the World Economic Forum on East Asia in Manila. Load factor refers to a measure of plane occupancy.

"These next two years, we have the ability to enter up to 85 percent," he said, adding the airline sees growth opportunities in the Philippine, Indian and Japanese markets.

Fernandes also said AirAsia will likely start servicing India in the third quarter after winning an operating permit from a Delhi court this month.

PLANE SALES, PROFITS

AirAsia plans to sell 12 planes this year, a move that will bring in around 500 million ringgit ($156 million) in net profit.

"Our planes are well sought for," he said, citing demand from airlines outside Asia. "Right now, as of today, we've got the right number of planes. We're not selling more."

On Tuesday, AirAsia reported its first-quarter net income rose 33 percent to 139.7 million ringgit ($43.47 million) on improved passenger numbers, foreign exchange gains and deferred taxes.

Full report here:

http://www.reuters.com/article/2014/05/22/us-airasia-ceo-idUSBREA4L07X20140522

[Mohd Azizul Ramli 2]

Can we identify the 12 planes that Uncle Tony wants to sell?

[flee 5]

Only those who have the MRO records can tell. I would think that they are high cycle planes needing C or D checks soon. Selling them would reduce MRO costs.

[flee 5]

Analysts' Presentation:

 

http://www.airasia.com/docs/common-docs/investor-relations/aa_1q14_analyst_presentation.pdf