Strong first half growth and 2Q12 results by AirAsia trio

AirAsia Berhad (Malaysia AirAsia – MAA), Thai AirAsia (TAA) and Indonesia AirAsia (IAA) have reported their results for the second quarter ended 30 June 2012 and the first half of the calendar year.

MAA posted strong 2Q12 revenue of RM1.18 billion, up 9% from a revenue of RM1.08 billion reported in 2Q11. Despite the increase of capacity of 12% YoY (with number of aircraft now at 58), demand remained solid with a passenger load factor of 80% for 2Q12.

Net operating profit was reported at RM130.94 million, slightly lower by 3% from a net operating profit of RM135.17 million reported in 2Q11.

Figures for the first half of this year (1H12) showed MAA revenues reaching RM2.35 billion, up 10% YoY, producing a net operating profit of RM298.91 million, an increase of 1% YoY. The net profit (including fair value gains) was RM1.37 billion, up 395% YoY. Passenger numbers rose by 11% YoY to 9.72 million.

AirAsia Berhad CEO, Aireen Omar, commented, “Despite the majority of airlines losing money or being severely behind in their earnings, AirAsia has continued to outperform each quarter by posting healthy profits with the year to date average fuel price up 4% YoY. Our cash position remains strong with RM2.16 billion in cash and bank balances, net gearing remained low at 1.10 times whilst our EBITDAR and EBIT margins were 32% and 17% respectively.”

Omar also pointed out that the company now recognised profit from Thai AirAsia of RM11.9 million and the Asian Aviation Centre of Excellence of RM2.2 million. “This is yet another affirmation of what we have always maintained that our affiliates and adjacenct business will contribute healthily to our bottom line whilst not including Indonesia AirAsia, Philippines AirAsia, AirAsia Japan and AirAsia Expedia which are still posting losses. Eventually when they grow to a larger scale, the company can stand to benefit larger contribution to the bottom line”.

Cost per available seat per kilometre (CASK) in 2Q12 was reported at 13.86 sen, an increase of 3% YoY and CASK, ex-fuel, stood at 7.02 sen, an increase of 6% YoY. Since 2Q11, the company financed nine out of 14 aircraft through sale-and-leaseback and operating lease deals, thus increasing the aircraft operating lease expense by 147% YoY.

“This quarter saw our RASK unchanged mainly due to the drop in our ancillary income per passenger spent from RM45 to RM37 YoY,” Omar added. “This was due mainly to our experiment on our baggage pricing which did not work. As the prices did not push demand higher as we envisioned, management then decided to reinstate the previous prices. Overall ticket demand also remained high despite an increase in average fare of 8% YoY and capacity increase of 12% YoY.”

Thai AirAsia posted revenue of THB4.43 billion, a growth of 16% YoY which it attributed to higher passenger volume from introducing new routes. Thai AirAsia achieved a net profit of THB245.79million in 2Q12, compared to a net profit of THB328.08 million in 2Q11. The load factor for 2Q12 was 79%. All this was on the back of TAA’s successful listing on the Stock Exchange of Thailand via its holding company, Asia Aviation Limited on 31 May 2012.

For 1H12, Thai AirAsia posted revenues of THB9.30 billion, which was up 17% on 1H11’s figure. The company carried 4.07 million passengers in 1H12, 18% more than in 1H11.

Indonesia AirAsia, meanwhile, recorded revenue of IDR986.52 million in 2Q12, up by 9% compared with the IDR901.82 billion achieved in 2Q11. This was attributed to higher passenger volume, which rose 15% YoY.

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