AirAsia's fourth-quarter profit drops 20 percent on fuel, tax costs
KUALA LUMPUR (Reuters) - Malaysian low cost airline AirAsia Bhd reported a 20 percent slide in quarterly net profit on Tuesday hurt by higher operating expenses and tax charges.
Its fuel expenses rose 66 percent while maintenance and overhaul increased threefold, a financial statement filed to the bourse showed.
Part of that reflected growth as AirAsia expanded its fleet by 17 percent to 123 aircraft.
Its fuel consumption increased 19 percent while fuel prices rose 8 percent.
Higher current and deferred tax charges weighed on the airline's profits, as well.
Net profit for the three months to December 31 fell to 372.6 million ringgit ($95.39 million) from 465.3 million a year earlier. Revenue rose 37 percent to 2.66 billion ringgit from 1.94 billion, although revenue per available seat km fell 4 percent.
Load factor, a measure of how full its planes are, rose 1 percentage point to 88 percent in the quarter while total passenger volume was up 17 percent to 10.4 million to outpace 16 percent growth in capacity.
The group said it expects to have an average load factor of 87 percent in the first quarter of 2018, based on current forward booking.
The group is also planning for a net increase of five aircraft through operating leases in the first quarter of 2018 to meet growing demand in the region, it said in a bourse filing.
Group CEO Tony Fernandes said in a statement that the group intends to more than double its fleet to 500 aircraft by 2027.
He also said ongoing internal reorganisation to simplify the group's structure was on track to complete in the second quarter of 2018.
"We believe that this new group structure will improve efficiency and transparency, which in time to come will help us achieve the fair valuation that reflects the true value of AirAsia," he said.
Fernandes also said the group would soon conclude the sale of leasing business Asia Aviation Capital.
AirAsia announced reorganisation plans last August, aiming to consolidate its various regional affiliates under one holding company while targeting rapid expansion in its core Southeast Asian markets.
Additionally, the group has segregated its businesses into airline transportation and digital divisions to provide better clarity and business focus across each division.
"This new structure will also give our rising digital ventures the same prominence as our traditional airline business," Fernandes said.
($1 = 3.9060 ringgit)
(Reporting by Liz Lee; editing by Jason Neely)
