AirAsia Q4 profit declines 56pc on fuel costs

http://www.btimes.com.my/Current_News/BTIMES/articles/20120222212126/Article/index_html

AirAsia Bhd, the region’s biggest budget carrier, posted a fourth straight drop in quarterly profit as fuel costs eroded gains from carrying more passengers.

Net income dropped 56 per cent to RM135.7 million (US$45 million), or 4.9 sen per share, in the three months ended Dec 31, from RM311.1 million, or 11.2 sen, a year earlier, the Sepang, Malaysia-based carrier said in an exchange filing today. Revenue rose 9 per cent to RM1.27 billion.

The company will take delivery of three Airbus SAS A320 aircraft in the first quarter of this year and will start two new routes from Malaysia, AirAsia said.

The carrier may start a low-cost airline in the Middle East and form ventures in South Korea and Vietnam as it seeks to expand to new markets, chief executive officer Tony Fernandes said this month. Services in the Philippines will begin as early as March.

“Passenger demand in the first quarter for the Malaysian, Thai and Indonesian operations remains positive,” AirAsia said in the statement today. “Load factors achieved in the month of January were higher than the prior year in Malaysia and slightly lower in Thailand and Indonesia, with average fares higher in all three countries.”

AirAsia fell 1.4 per cent to RM3.65 at the close in Kuala Lumpur, before the earnings announcement. The stock has declined 3.2 per cent this year, while the FTSE Bursa Malaysia KLCI Index has gained 2 per cent.

Fuel expenses at AirAsia jumped 62 per cent to RM475 ringgit in the fourth quarter from a year earlier. A charge of deferred tax more than doubled to RM198 million.

AirAsia flew 9 per cent more passengers in the quarter from a year earlier. Average fare per passenger rose 4 per cent to RM196.

AirAsia’s long-haul arm last month said it will stop flying to London, Paris and India because of the introduction of a European carbon-emissions levy, a tax increase in the UK and slowing demand.

Largest shareholders of AirAsia, including CEO Fernandes, last year swapped a stake in the carrier for shares of Malaysian Airline System Bhd, the nation’s biggest long-haul carrier.

AirAsia’s venture in Japan with All Nippon Airways Co. will begin flying in August, while the long-haul affiliate AirAsia X Sdn is considering a new hub in Australia. -- Bloomberg