Sharp fall in profits in Q3 2011 for Air Asia
KUALA LUMPUR: Malaysian budget carrier AirAsia said net profit slumped by more than half in the third quarter as fuel prices surged and warned that the next four months would also be challenging.
The report by the region's biggest no-frills airline follows a third straight quarterly loss for Malaysian Airlines, which also suffered as a result of higher petrol costs.
AirAsia said in a statement late Tuesday that net profit fell 53 percent to 152.3 million ringgit (US$47.8 million) from 327.3 million for the same period last year.
Although revenue rose 9.9 per cent to 1.08 billion ringgit from 979.7 million last year -- aided by an 8.0 per cent rise in passengers -- it said fuel expenses spiralled 45 per cent to 421.2 million and staff costs rose 38 per cent to 126.3 million.
AirAsia said that based on forward booking trends, the three months to December for its Malaysian, Thai and Indonesian operations was positive but warned that the outlook "should be seen in the context of the current high price of oil and aviation fuel."
It said that recently introduced fuel surcharges have "mitigated, but not fully offset, the effect of higher fuel prices."
On Monday Malaysia Airlines posted a net loss of 478 million ringgit for the quarter ended September 30. That followed losses of 242.3 million ringgit in the first three months of 2011 and 527 million ringgit in April-June period.
In August, Malaysia Airlines and AirAsia announced a surprise alliance that would eliminate head-to-head competition on some routes, allowing each to focus on their core markets.
Analysts have hailed the deal, saying AirAsia will be able to concentrate on offering low-cost journeys, while Malaysia Airlines caters to more upmarket travellers.
AirAsia Chief Executive Tony Fernandes told analysts in a conference call that he expects both airlines to make an announcement on its collaboration in the first week of December.
"We are looking at tremendous cost savings," he said.