AirAsia's profit drops on higher operating costs

[KUALA LUMPUR] Malaysian budget airline AirAsia reported a 33 per cent drop in its second-quarter net profit on Thursday, due to a rise in operating and financing costs.

Net profit for April-June fell to 243 million ringgit from 367.2 million ringgit, although the airline carried 10 per cent more passengers and maintained a load factor of 79 per cent of capacity in what is usually the weakest quarter in the year.

Revenue was flat at 1.3 billion ringgit.

Indonesia was the only market for the group to see a drop in passenger traffic, following the crash of Flight QZ8501 into the Java Sea in December, with revenue from the local business unit down 16 per cent and passenger numbers down 18 per cent.

However, loadings and average fares in Indonesia have improved in the third quarter as a result of efforts to restore the brand, AirAsia said.

The airline turned things around in the first quarter of this year after a loss of 429.5 million ringgit in the Oct-Dec period, its first loss since 2008.

Meanwhile long-haul budget airline AirAsia X announced its second quarter results on Wednesday, registering a net loss of 132 million ringgit. Passengers carried declined 20 per cent and load factor fell to 68 per cent.

Shares in AirAsia closed 5.6 per cent lower on Thursday at 1.01 ringgit, its lowest point since May 2010.

REUTERS