AirAsia X: More people to the skies with high profit

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Passengers on the flight to Mauritius - AirAsia has suspended the flights indefinitely

Public listed AirAsia X Bhd (AAX) took more people to the skies, profiting with record gains in its books though results fell short of analysts’ estimates.

AAX posted a net profit of RM39mil for the October-December quarter, lower than the RM197.4mil recorded a year ago.

For the full year, profits came in at RM230.5mil, versus an average estimate of RM236mil from ten analysts polled by Thomson Reuters.

Revenue rose 39% to RM1.17bil for the quarter, versus RM841mil in the same period last year.

The airline reported a 40% year-on-year growth in the number of passengers carried.

But its fourth quarter showed a massive dip in revenue which the company blamed on the low and volatile Malaysian ringgit.

Hit by the dwindling local currency which has dragged its earnings down by a whopping 80% in the fourth quarter, the airline expects its prospects to remain positive in the near future.

Today it is launching a new route adding Bhubaneswar into its list of destinations in India with four weekly direct flights from Kuala Lumpur, which will commence operations on 26 April 2017, making this AirAsia’s 14th route into India.

Celebratory all-in-fares from RM99* one way are available for booking from 23 February until 5 March 2017 for the travel period from 26 April 2017 until 27 October 2017 is available on its website, the company said today.

However, AirAsia X is still marred by the abrupt cancellation of its Mauritius flights, which caused massive backlash against both the company and its local competitor Air Mauritius in the tiny Indian Ocean Island state.

AAX chief executive Benyamin Ismail said in a statement late yesterday that the company would look to reduce the impact of forex rates by intensifying sales from stronger currency markets such as the Australian dollar to offset US dollar bills.

“As we foresee the industry’s challenging environment persisting, owing to the currency volatility, the management will continue to look for avenues to mitigate forex risk via edging,” he said.

The airline has already added capacity in Australia and is increasing frequency on other routes where demand is high to shore up its results, having been in the red for the past two years.

Last month, the airline said it had become Asia’s first low-cost carrier to receive approval to operate scheduled passenger flights to any US destination.

Benyamin said the airline was also looking to cut cost.