AirAsia X posts 2Q profits, plans group synergies and North Asia focus

In 2Q2017 ending June 30, AirAsia X recorded RM47.4 million (US$11.1 million) profit after tax, representing its seventh consecutive quarter profit.

Revenue grew 17 per cent year-on-year to RM1 billion mainly driven by the 34 per cent increase in passengers, exceeding the 26 per cent increase in seat capacity. Load factor was up five percentage points to 80 per cent despite a 26 per cent capacity injection to 8.4 billion in available seat kilometres (ASK) terms.

Revenue per available seat kilometre was down seven per cent to 12.38 Malaysian sen. However, cost per available seat kilometre was also down seven per cent to 12.32 sen, despite higher fuel prices, on the back of better cost efficiencies and higher aircraft utilisation.

Malaysia AirAsia X CEO Benyamin Ismail said: “Revenue crossed the billion ringgit mark for the first time in the company's second quarter history. Scheduled flight revenue contributed 61 per cent of total revenue, while ancillary revenue grew 41 per cent to RM193.5 million driven by the implementation of dynamic baggage and seat pricing, extension of in-flight entertainment availability to more routes, premium lounge and more.”

While Australia remains its Malaysia operations’ highest revenue contributor, China is fast catching up, AirAsia X Group CEO Kamarudin Meranun said.

Kamarudin continued: “Moving forward into 2H2017, the group plans to re-strategise its position in Australia while focusing on the opportunities available from North Asia. The group is also streamlining operations across the board to further unlock greater synergies with AirAsia Group. We expect this cost reduction initiatives will help us achieve up to 10 per cent cost savings.”

Meanwhile, AirAsia X Thailand posted a strong 92 per cent load factor, an increase of three percentage points, boosted by eight per cent increase of international tourists to Thailand. Revenue was up 28 per cent and passengers carried rose 26 per cent, exceeding ASK capacity growth of 21 per cent.

Kamarudin said: “We expect Thailand operations to extend its promising growth in 2Q2017 as AirAsia X Thailand has been successfully re-certified for its Air Operator’s Certificate by the Civil Aviation Authority of Thailand in June 2017. We hope that ICAO will remove the red-flag on Thailand soon as it will clear constraints restricting Thai-registered airlines from operating internationally.”

Turning to AirAsia X Indonesia, net loss was narrowed to US$3.8 million from US$9.8 million in 2Q2016. “We foresee an overall improvement from Indonesia in the coming quarters through greater operational synergies with AirAsia Group, especially AirAsia Indonesia,” said Kamarudin.

-TTG Asia.