AirAsia Profit Down On One-off Tax Slug

Low cost carrier AirAsia Group reported a 53 percent drop in second quarter net profit, mainly due to a deferred tax charge.

Net profit came in at MYR139.9 million ringgit (USD$32.7 million), from MYR298.3 million in the previous year period as the MYR212 million deferred tax liability hit the bottom line.

Revenue powered ahead to MYR2.38 billion ringgit, up from MYR1.99 billion in 2Q16, as passenger numbers rose by around 10 percent to 9.6 million. Operating profit was 37 percent ahead on MYR516.5 million.

“Despite the tougher operating environment in the seasonally weaker second quarter of the year, we managed to serve more passengers and increase our load factor in almost all the markets we operate in,” group chief executive Tony Fernandes said.

Unit revenue (RASK) rose 11 percent, and unit cost by 5 percent on higher aircraft fuel expenses. Seat load factor was up 2 percentage points to 89 percent.

“The consolidated accounts combining our Malaysia, Indonesia and Philippine units for the second quarter show we have managed to fight higher fuel costs with strong revenue growth of 19 percent year-on-year, resulting in a 37 percent year-on-year gain in operating profit,” Fernandes added.

Looking forward, AirAsia group wants to add 30 new aircraft each year, with a total fleet size projected to be 500 planes by 2027. “I’m confident that we can reach this target or even exceed it, especially as we set up our new associate airlines in Vietnam and China in the coming years,” Fernandes said.