Low cost carrier AirAsia posted a 47.6% decline in net profit to RM104.25 million (US35 million) for the second quarter ended June 30, compared to the same period a year ago on higher fuel costs.
Revenue for the quarter under review increased 15.2% to RM1.08 billion compared to the quarter a year ago.
The airline's group chief executive officer Tan Sri Dr Tony Fernandes (pictured left) said in a press release that the second quarter was traditionally one of its weaker quarters, but despite the challenging environment in the industry the team has come through again.
"Costs have gone up, but much less than among others in the industry. We've grown revenues, our cash balance is a healthy RM 1.9 billion, and our gearing level has been reduced to 1.48 times as compared to 2.27 times a year ago," he said.
He added that the airline was on track to achieve the goals for the year and was building on an already strong foundation to enhance growth in the coming months and years.
"Also great progress has been made in monetising our ancillary investment like CAE and Expedia which will allow myself and the management to focus more on the operations."
Fernandes said due to the affordable fares a higher passenger load factor of 81%, which was four percentage point higher year-on-year, was achieved.
On ancillary income, Fernandes said it has been a tremendous revenue stream for the airline with ancillary income for AirAsia Malaysia, AirAsia Thailand and AirAsia Indonesia seeing gains.
Fernandes remains bullish on the prospects of the remaining two quarters of 2011.
"Load factors achieved in July 2011 increased year-on-year (y-o-y) for all three carriers. Forward bookings are looking very strong. We shall continue to work our best to deliver high load factors of at least 80% and to maintain the lowest operating costs in the industry."
The fall in crude oil prices and strengthening of respective local currencies will help ease the impact of high jet fuel prices on operating costs.
Looking beyond 2011, Fernandes said AirAsia would stay focused on its own strategy – containing or driving down costs, raising yields and further expanding network reach.
"The setting up of the AirAsia ASEAN office in Jakarta will allow us to and promote both the airline and the company as a regional brand."
Fernandes revealed that AirAsia Philippines was on track to launch its first routes the fourth quarter.
He is also "very excited" about AirAsia Japan, a joint venture with All Nippon Airways and AirAsia's first venture outside of ASEAN, as "Japan is a huge, huge market with a very low LCC penetration rate."
AirAsia 2Q11 by the numbers
• Revenue: RM 1.08 Billion (up 15% y-o-y)
• Profit before Tax: RM145.0 Million (up 0.6% y-oy)
• Cash Balance: RM 1.9 Billion
• Malaysian Operations:
o Revenue / ASK: 16.71 sen (up 6% y-o-y)
o Ancillary Income per pax: RM 50 (up 15% y-o-y) ·
• Thailand Operations:
o Passengers: 1.6 Million (up 30% y-o-y)
o Ancillary Income per pax: THB 405 (up 30% y-o-y)
• Indonesia Operations:
o Passengers: 1.3 Million (up 33% y-o-y)
o Ancillary Income per pax: IDR 139,680 (up 10% y-o-y)
• Net Gearing Ratio: 1.48 (reduce from 2.27 y-o-y)
• Amount due from Thailand fully paid off