AirAsia reports big jump in profit, warns on surcharge

>> Friday, February 25, 2011

KUALA LUMPUR, Feb 24 – Malaysia’s AirAsia Bhd reported an eight-fold increase in quarterly profit driven by growth in passenger volumes, and warned it may have to impose a fuel surcharge if oil prices stayed high.

The airline said it filled 82 per cent of the space available for passengers in the fourth quarter, up three percentage points from a year ago.

“Based on the current forward booking trend, the underlying passenger demand in the first and second quarters for the Malaysian, Thai and Indonesian operations remains positive,” AirAsia, Asia’s largest budget carrier by fleet size, said in a statement today.

Earlier this month, industry association IATA said the number of international air passengers from mainland China will rise by an average of 10.8 per cent per year through to 2014, making it the world’s fastest-growing market.

Net profit for October-December was at RM316.6 million compared with a profit of RM33.8 million a year ago.

Full-year net profit came in at RM1.1 billion against RM506 million a year ago, exceeding the RM822 million net profit forecast of 19 analysts tracked by Thomson Reuters I/B/E/S.

The budget carrier, which competes with Jetstar Asia Airways and Tiger Airways in the region, said it will take delivery of three A320 aircraft in the first quarter of the year, one of which will be operated in Thailand and two in Indonesia.

Nineteen out of 22 analysts tracked by Thomson Reuters I/B/E/S have either a “buy” or “strong buy” call on AirAsia shares, with a median target price of RM3.50 per share.

The stock has fallen by nearly 11 per cent since the start of the year compared with the two per cent fall in the benchmark stock index.

AirAsia shares fell more than five per cent today after oil prices hit a 2-1/2 high on concern the political tension in OPEC-member Libya could spread to other oil producers in the region. – Reuters



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