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Tue, Feb 22, 2005 - Page 12 News List

AirAsia announces strong growth in quarterly earnings

AFP , KUALA LUMPUR

Malaysia's AirAsia, the region's first and biggest budget carrier, said earnings rose sharply as the company benefitted from a strong pickup in demand, for which it and a growing number of other low-cost airlines are responsible.

It said its three months to December net profit rose to 44.3 million ringgit (US$12 million) from 10.5 million in the three months to September as sales rose 55 percent to 178.6 million ringgit.

Sales for the six months to December totalled 302.8 million ringgit with net profit at 54.8 million ringgit.

Corresponding figures from a year earlier were not provided since AirAsia only became a listed company in November.

AirAsia said it had a load factor of 73 percent in its second quarter, down four percentage points from the first quarter as capacity increased to serve new domestic and international routes, and increased frequencies on others.

The number of passengers carried rose to 1,126,393 from 984,621 in the first quarter as average fares increased to 153 ringgit from 122 ringgit. It said the performance of associate company Thai AirAsia was impacted by both price competition and the availability of fewer aircraft than originally forecast.

Last December, AirAsia announced it would buy 40 Airbus aircraft and exercise an option to buy another 40 A320 jets to maintain its position as Asia's leading budget airline.

A senior AirAsia official said yesterday that the carrier had secured regulatory approval from China's aviation authorities to launch air services.

"We will fly out of Bangkok to various destinations in China," the official said on condition of anonymity. He did not elaborate.

AirAsia said while the carrier continues to trade positively with unit costs decreasing, it was likely the results for the balance of the financial year would be affected by its inability to acquire sufficient aircraft on a timely basis to meet its expansion program.

Another factor that may hurt its performance in the current financial year was the continuing high level of fuel prices, it said.

AirAsia said it was expected to incur start-up losses in Indonesia and the impact of these factors would become clear in the next quarter but otherwise it remains positive about its future growth prospects.

AWAIR, the Indonesian arm of AirAsia, early this month said it had dropped plans to add a Jakarta-Singapore route to its fledgling operation after Singaporean officials refused to approve the service.

Launched as a budget carrier in December 2001 with just two aircraft, AirAsia has defied the sceptics to become a significant player in the air industry.

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