AirAsia X trims losses by half

by **Cals** Wed 21 Aug 2013, 11:05

AirAsia X trims losses by half
Business & Markets 2013
Written by Cynthia Blemin of theedgemalaysia.com
Wednesday, 21 August 2013 10:23

KUALA LUMPUR: Long-haul budget carrier AirAsia X Bhd recorded a lower net loss of RM32.3 million for the second quarter (2Q) ended June 30 compared with RM77.64 million in the previous corresponding period. Revenue rose year-on-year by 21.2% to RM491.14 million from RM405.2 million before.

For the first half (1H) ended June 30, earnings stood at RM17.89 million or 6.7 sen per share from a net loss of RM29.1 million a year ago. Revenue was RM1.03 billion, up 9% from RM941.9 million previously.

The airline reported an operating profit of RM45.98 million for 1H, a significant improvement from a year ago, compared with an operating loss of RM4.64 million.

Earnings before interest, tax, depreciation, amortisation and rental margin strengthened to 17.9% in 1H13 from 13.2% in 1H12.

Operating profit margin saw a turnaround from an operating loss margin of 0.5% last year to a 4.5% operating profit margin this year.

Revenue per available-seat-kilometre grew by 12.8% to 4.11 US cents (13.5 sen) in 1H this year from 3.64 US cents in 1H last year.The better quarterly results were primarily driven by an increase in passenger volume and seat capacity, as well as higher contribution from ancillary revenue, AirAsia X said in a statement yesterday.

Ancillary revenue in 2Q, increased by about 31.7% year-on-year to RM99 million, representing 20.1% of total revenue.

"After the realignment of our network during the first half of 2012, our strategy is now more focused on our core markets, where we will increase frequencies and add new destinations to build a market leadership position," said AirAsia X CEO Azran Osman-Rani.

"Our return to profitability shows that we were right to re-tool our portfolio to focus on the Asia-Pacific region, where there are many underserved markets," he said.

AirAsia X had undertaken a consolidation of its route network for the better part of last year, when the airline terminated a number of unprofitable routes.

The airline discontinued its flights to Europe and India in 1H last year, resulting in fewer routes to 14 from 17 initially. AirAsia X focused its networks on core markets in North Asia and Australia, including increasing average weekly frequencies per route by 14%.

This article first appeared in The Edge Financial Daily, on August 21, 2013.