Business Round-Up
AirAsia Group brings home mixed report card
September 1st 2014
Tony Fernandes said his AirAsia Group second quarter profit jumped to 367.2 million ringgit (US$116.01 million), from 58 million ringgit in the same months last year, with a foreign currency gain of 203 million ringgit on its borrowings compared with a loss of 122 million ringgit a year ago. Read More » Revenue increased 5% to 1.31 billion ringgit, with other revenue at 75 million ringgit for the period against 16 million ringgit 12 months ago.
However, the group’s affiliates remain a drag on its performance, particularly in Indonesia, Thailand, the Phillipines and at budget subsidiary, AirAsia X. Losses widened to 128.9 million ringgit (US$40.9 million) at the Kuala Lumpur-based long haul airline due to its strategy of capacity and network growth. Second quarter revenue rose by 36.7%, to 671.6 million ringgit, but operating expenses also jumped to 59%, or 807.3 million ringgit. AirAsia X CEO, Asran Osman-Rani, said in a company statement that capacity growth had put pressure on earnings, but the carrier now has its strongest network of cities in each of the airline’s markets and frequencies that provide convenient transfer connections. The airline said it expected yields to return to positive growth in the second half of 2014, building on its average load factor of above 80%.
