AirAsia second quarter profit up 43%; defers seven A320 deliveries to 2015

AirAsia A320. Photo: Courtesy, Airbus.

AirAsia reported second quarter net income of MYR199 million ($63 million), up 43% over a MYR139.2 million profit in the year-ago period, and announced that it will defer delivery of seven A320s from 2011 to 2015.

"Capacity concerns … are one reason for the deferments," CEO Tony Fernandes said in a statement. "Another is our strategy to lower our gearing ratio, ensure we have the sufficient revenue from our operations to fund the purchase of aircraft."

Second quarter revenue increased 26% to MYR941 million. The company said the revenue total was its best ever for a second quarter, adding that the second half of the year is "potentially dynamic."

Fernandes noted that ancillary revenue is providing a big boost, pointing out that the airline's average passenger is now spending MYR40 on ancillary services. "The numbers reaffirm our conviction that in ancillary [charges] we have unearthed a gushing revenue stream that can boost our bottom line and also serve as a buffer to rising fuel prices," he said.

Passengers carried in the second quarter lifted 11% year-over-year to 3.9 million. Load factor rose 2 points to 77%.

AirAsia Thailand posted 24% year-over-year growth in second quarter revenue to THB2.66 billion ($84.1 million) and its net income heightened 161%, AirAsia said, but declined to provide an exact profit figure. Fernandes said the subsidiary airline could be publicly listed in Thailand as soon as "next year." AirAsia Indonesia saw its pre-tax second quarter income jump 272% to IDR111.4 billion ($12.5 million), the company said.

Fernandes expressed optimism regarding AirAsia's full year results. "The fourth quarter, of course, is traditionally our strongest quarter," he stated. "To head into our strongest season on the back of a soaring first quarter (ATW Daily News, June 2) and a record-breaking second quarter puts us in a fantastic position."