AirAsia X Q1 Profit Drops On Currency, Fuel Costs

Malaysia’s AirAsia X reported a 94 percent drop in first quarter net profit as higher fuel and staff costs weighed.

The long-haul low cost carrier saw its net profit in the quarter to end March tumble to MYR10.3 million (USD$2.4 million) from MYR179.5 million in the previous year period.

On an operating level, profit dropped 42.6 percent to MYR60.3 million as fuel costs jumped 55.4 percent to MYR377.7 million. Staff costs also rose, up 40.3 percent to MYR105 million.

The higher costs more than offset the 21.6 percent revenue increase to MYR1.18 billion. The LCC attributed the higher revenue to a 33 percent increase in passengers carried at 1.4 million in the quarter. Passenger load factor rose 2 percentage points to 84 percent.

RPK (revenue passenger km) traffic was also up 33 percent on an ASK (available seat km) capacity increase of 29 percent.

AirAsia X noted that the weak ringgit exchange rate against the US dollar contributed to the lower profit as fuel and aircraft operating leases are dollar denominated.

Looking forward, AirAsia X said the booking trend, forward loads and average fares are trending better than the previous year, but local currency weakness is seen as a key concern.