Asia's biggest budget airline flying high as profits soar

AirAsia, Asia’s biggest budget airline, reported a 41 per cent surge in second-quarter profit on Monday as it benefited from stronger demand and lower fuel costs. The airline also said it was seeing strong demand for the third quarter and expects a load factor – a measure of how full planes are – in its […]

AirAsia, Asia’s biggest budget airline, reported a 41 per cent surge in second-quarter profit on Monday as it benefited from stronger demand and lower fuel costs.

The airline also said it was seeing strong demand for the third quarter and expects a load factor – a measure of how full planes are – in its home country Malaysia of 90 per cent in the third quarter, from 87 per cent in the second quarter.

“In Malaysia, demand remains extremely robust and we foresee this to improve in the coming quarters as consumer sentiment is picking up in the domestic economy,” said the AirAsia Group chief executive Tony Fernandes.

Mr Fernandes, best known for transforming AirAsia into Asia’s biggest budget carrier after founding it with two aircraft a decade ago, is now focused on accelerating the company’s growth in large markets such as India.

The airline also forecast 80 per cent-plus load factors for Thailand, Indonesia, India and the Philippines.

Net profit for the three months through June jumped to 341.9 million ringgit (Dh310.6m) from 243m million ringgit a year earlier. That compared with the 326m ringgit average of four analyst estimates compiled by Reuters.

Revenue was 1.62 billion ringgit, 23 per cent higher than a year ago.

Last week, AirAsia confirmed it was considering options for its leasing arm, Asia Aviation Capital (AAC), including a potential sale, weeks after it was reported the airline was looking to sell a majority stake in AAC, or possibly the entire business, which the carrier values at 4.1bn ringgit.

AirAsia’s share price has more than doubled this year and closed at 2.99 ringgit on Monday after rising to a three-year high this month, lifted by plans for AAC and as analysts raised their earnings estimates for the airline.

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Source: Business

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