AirAsia profit up in Q1 on lower fuel costs

Malaysia-based AirAsia, the region's biggest low-cost carrier by fleet size, said its first-quarter net profit climbed seven percent year-on-year due mainly to lower fuel and operating costs.

Net profit for the quarter ending March 31 was 149.3 million ($40.8 million) the company said in a statement late Thursday, while revenue dipped 0.4 percent to 1.30 billion ringgit.

"As seen in the first quarter of 2015, we are beneficiary of the low fuel price," Tony Fernandes, group CEO said in a statement.

AirAsia recorded a net profit of 139.7 million ringgit in the same period last year while it posted its first net loss (since 2008) of 429.4 million ringgit in the previous fourth quarter.

AirAsia said total passengers carried during the period rose 3.0 percent to 5.5 million people year-on-year while average fuel price was 20 percent lower at $88 per barrel.

It is the carrier's first results following the crash of one of its planes in the Indonesian archipelago last December, with the loss of 162 lives.

Flight QZ8501, operated by AirAsia's Jakarta-based affiliate, went down in the Java Sea en route to Singapore from the Indonesian city of Surabaya.

"Indonesia AirAsia was on a good turnaround track in the last two quarters of 2014 but unfortunately was faced with a tragedy that impacted its turnaround timeline," Fernandes said.

Meanwhile, AirAsia said that its Indonesian unit recorded a 26 percent fall in passenger volume and a 19 percent decline in capacity.

"Demand is expected to remain moderate post QZ8501 but is expected to improve leading up to the peak season (for travel) as brand recovery efforts launched in April by Indonesia AirAsia take effect," AirAsia said.

With impressive performance in Malaysia and Thailand, Fernandes said: "Sales are looking good in the second quarter as demand from China is slowly coming back."

Fernandes also said the carrier will continue to drive its ancillary revenue up, adding that the restructuring of loss-making Malaysia Airlines will bring about a healthier competition environment for all industry players.

AirAsia also said it will take fewer deliveries of new aircraft and dispose of older planes as part of its cost cutting measures.