Southeast Asia's largest budget carrier AirAsia flagged Friday a further recovery in air travel demand after reporting a profit in the third quarter, helped by higher sales of non-ticket items.
Airlines globally have struggled in the past year as the economic crisis sapped demand for travel and trade, but budget carriers have largely outperformed as passengers look to cut costs. "Based on the forward booking trend, the underlying passenger demand in the fourth quarter is positive," Tony Fernandes, group CEO of AirAsia, said in a statement.
AirAsia booked a net profit of MYR130 million ringgit in July-September, against a loss of MYR465.5 million a year earlier.
AirAsia's average fare fell 27 percent to MYR142 in the third quarter, but the 86 percent jump in ancillary income, or income from sources other than ticket sales, more than offset the lower fares.
Singapore Airlines and Korean Air, two of Asia's biggest airlines, last week flagged a recovery in travel demand after their quarterly results showed some signs of improvement.
"While the airline industry is facing arguably the most difficult environment in recent memory, we see vast opportunities to grow our business," Fernandes said.
The budget airline will launch several new routes over the next 12 months, including to several Indian cities, he added.
AirAsia has secured 20 percent of the airline's fourth quarter fuel needs at an average fixed swap rate of USD$74.98 per barrel.
Analysts said AirAsia is well-positioned to benefit from more tourist traffic into Singapore when the two integrated casino resorts there open their doors to the public in 2010.
AirAsia's share price has gained 48 percent since the start of the year, in line with the 45 percent rise in the broader market index.
