Posted on: 24 August 2016 by Mark Howells
AirAsia X Berhad (AAX) has reported its financial results for the second quarter of 2016 (2Q16), including a revenue of RM883.2 million, a 35% increase year-over-year, marking the first time the carrier has achieved a profit during its second quarter operations.
2Q16 has seen AAX post an operating profit of RM20 million, while net profit after tax for the quarter stands at RM1 million, as compared to a loss of RM132.9 million for the same period the previous year.
The airline attributes this to a strong load factor of 75%, up seven percentage points year-over-year, despite the fact AAX increased available seat kilometres by 17% to 6,682 million from 5,693 million in 2Q15 by increasing the frequency on popular routes.
During the quarter under review, revenue per available seat kilometre also grew by 15% to 13.24 sen from 11.51 sen in 2Q15, while the average base fare saw a significant growth of 34% to RM526.Furthermore, cost per available seat kilometre decreased 2% year-over-year to 13.20 sen due to lower fuel prices. However, this was slightly offset by five additional A330 operating lease aircraft with higher
rental rates in comparison with 2Q15.
AirAsia X Group’s CEO, Datuk Kamarudin Meranun, stated, “While the second quarter has historically been a lean quarter for us, we have managed to overcome all odds and record our first second quarter profit since inception.
“We continue to see improvement across all segments. In 2Q16, Australia contributed the highest growth to Malaysia AirAsia X operations. Revenue from Australia increased 56% year-over-year on the back of higher passenger traffic, while the average base fare rose by 15%. Revenue from China also grew 47% year-over-year, while load factor improved 11 percentage points to 82% and the average base fare rose by 53%.
“We believe this trend will remain for the rest of the year as a result of the Malaysian Government initiative on visa waiver for Chinese travelling to Malaysia coupled with an increase in Fly-Thru traffic to our core markets with improved timing. The future for AAX Group will see us expanding to China and other core markets, in line with our strategy to build market dominance within the region.
“We took delivery of two aircraft, both under operating lease for our Malaysian operation, to cater for our expanding network, bringing our total fleet to 30 as of August 2016. There will be no more deliveries until 2018.”
“Thailand AirAsia X recorded a strong 89% load factor, an increase of 17 percentage points year-over-year from 72%. This was boosted by an 8% increase in the number of international tourists to Thailand in 2Q16. Revenue was up 17% year-over-year and passengers carried rose by 35%, exceeding the airline’s capacity growth of 3%. This was despite the ICAO downgrade in December which prompted Japan and South Korea to put a freeze on additional flights by Thai-registered airlines.”
“Indonesia AirAsia X (IAAX) posted a net loss of USD8.9 million in 2Q16 from USD8.2 million in the same period last year. As Indonesia’s operational environment remains challenging, we will temporarily cease IAAX’s Australian routes in September with the aim of restarting service next year.”
Benyamin Ismail, CEO of Malaysia AirAsia, added, “We have benefited from the low-fuel environment and hedged all our remaining requirements for this year based on planned existing routes, which has certainly allowed us to better manage cost while exploring new strategic routes. As a result, we trimmed CASK by 2%, however, the weakening of the ringgit prevented further cost reductions as most of our costs are denominated in USD.
“Revenue improved 35% year-over-year to RM883.2 million for the second quarter, as scheduled flights revenue surged by 71%. The healthy demand for our award-winning Premium Flatbed product pushed up premium cabin load factor to 69% while revenue soared to RM42 million, an increase of 50% year-over-year. Ancillary revenue increased by 31% to RM136.9 million, and we foresee this number growing even further with the launch new ancillary products such as our exclusive Premium Lounge opening in September 2016, in-flight entertainment on flights to all markets – not just Australia – and the availability of new insurance products that protect both our guests and their gadgets while travelling abroad.”