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2015 Q2 Financial Results for Air Asia Group

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AirAsia X net loss widens on fewer flights

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PETALING JAYA: AirAsia X Bhd (AAX) extended its net loss to RM132.94mil during the second quarter ended June 30, from a net loss of RM128.79mil a year earlier.

The long-haul associate of AirAsia Bhd also posted a 2.7% dip in revenue to RM653.03mil against RM671.61mil in the same quarter last year.
In its filing with Bursa Malaysia, AAX said the decrease was mainly due to lower schedule flights including fuel surcharges as a result of lower passengers flown. However, despite load factor falling to 12%, average passenger fare improved by 7.2% to RM415.91 during the quarter.
Charter revenue grew to RM119.3mil from RM85.7mil in the previous corresponding quarter on more charter contracts secured.
Ancillary revenue including AirAsia Insure fell 24.3% to RM106.6mil against RM140.7mil last year due mainly to the lower number of passengers flown.
Meanwhile, aircraft operating lease income increased to RM65.4mil from RM17mil in the second quarter of 2014 due to additional aircraft sub-leased to Thai AirAsia X Co Ltd (TAAX) and PT Indonesia AirAsia Extra (IAAX).
Revenue per available seat kilometre (RASK) during the quarter increased 6.7% to 11.51 sen, compared with 10.79 sen previously.
AAX’s other operating expenses fell 56% to RM30.4mil due to the recognition of unrealised foreign exchange gain in operations from the weaker ringgit.
For the first half, AAX almost doubled its net loss to RM258.86mil from RM140.1mil previously. Revenue was slightly higher at RM1.428bil against RM1.421bil in the year before.
RASK increased by 7% to 12.24 sen during the first half.
For the first half, scheduled flights including fuel surcharges, fell 11.6% to RM794mil due mainly to lower passengers flown. However, average passenger fare increased by 7.8% to RM462.29 for the six months.
Charter revenue increased to RM232.7mil on more charter contracts secured. Meanwhile, ancillary revenue including AirAsia Insure, decreased 19.3% to RM234.6mil due to the lower number of passengers flown.
Aircraft operating lease income was higher at RM112.5mil due to additional aircraft being sub-leased to TAAX and IAAX.
The group’s operating expenses decreased 3.7% to RM1.534bil on lower aircraft fuel expenses, and other operating expenses. However, maintenance, overhaul, user charges and other related expenses; and aircraft operating lease expenses increased during the six-month period.
Moving forward, AAX said advance bookings indicated that recovery in passenger and yields evident in the second quarter quarter would hold up for the rest of 2015. It expects average fares to be higher on resumption of marketing activities and better price discipline.
“The company remains on track with its turnaround plan with a focus on optimising fleet size and improve yields and loads,” it said. AAX added that the severe weakening of ringgit would adversely impact its financial performance.
It believes it has taken the necessary steps to rationalise its operations and improve financial performance, taking into account its recently completed rights issue with warrants exercise.
Meanwhile, India’s Tata Group has increased its stake in AirAsia India to 41% from 30% previously. AirAsia also announced US$160mil (RM656.4mil) in cost savings from weakening crude oil prices, was expected next year.
Following this, shares in AirAsia hit a high of RM1.13 and was one of the top 10 most active stocks traded on Bursa yesterday. It closed the day 2 sen lower to RM1.07 with 35.5 million shares done.

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AirAsia profit down on higher costs and weak ringgit

 

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 today its second quarter net profit was RM243 million, down by 33.8% year-on year.
The carrier posted a net profit of RM367.2 million in the same period last year.
Its revenue remained mostly flat, rising just 1% to RM1.32 billion from RM1.31 billion during the same period last year.
AirAsia is led by flamboyant boss Tan Sri 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 travellers has also recovered starting from May 2015 onwards and with fuel trending favourably 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 RM132.94 million.
During the same period last year, it posted a net loss of RM128.79 million. – AFP, August 20, 2015.

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AirAsia 1H2015 results: the region’s leading LCC regroups for the long run, reining in expansion

 

AirAsia is slowing expansion as it attempts to turn around struggling affiliates and restore profitability. Six of the eight AirAsia-branded carriers were unprofitable in 1H2015 with only the long established short-haul carriers in Malaysia and Thailand in the black.

Passenger traffic across the AirAsia family grew by only 6% in 1H2015 to 26.5 million. 2015 will almost certainly see the slowest annual traffic growth in AirAsia’s 14-year history.
2015 will also mark the first year AirAsia will shrink its fleet. AirAsia now plans to end 2015 with 193 aircraft, including 166 A320s and 27 A330-300s, compared to 197 aircraft at the beginning of the year. Extremely modest growth is now planned for the next three years, resulting in a fleet of 208 aircraft (177 A320s and 31 A330s) at the end of 2018.
This report examines the overall position and outlook for AirAsia with a focus on the five short-haul LCCs that fall under the AirAsia Group.

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