KUALA LUMPUR: AirAsia Bhd posted net profit of RM554.20mil in the fourth quarter ended Dec 31, 2015 compared with a net loss of RM428.51mil a year ago, boosting the full year FY15 earnings to RM540.96mil.
The low-cost carrier reported on Friday that quarterly revenue rose 47% to RM2.17bil fromRM1.48bil a year ago.
“The strong revenue recorded was on the back of a 10% year-on-year growth in the number of passengers carried at 6.47 million which was ahead of the 1% capacity growth, allowing the company to record a high load factor of 85%, on-year growth of 7 percentage points (ppts).
In 4Q15, AirAsia recorded strong operating profit of RM800.69 million (up 276% YoY) and net operating profit of RM694.33 million (up 620% YoY).
AirAsia said revenue per available seat kilometre (RASK) was up 40% on-year to 22.29 sen. It pointed out RASK held up positively despite the company’s decision to remove fuel surcharge on Jan 26, 2015.
“Average fare similarly witnessed an increase to RM177 (up 4% on-year) on the back of strong and healthy demand. If excluding fuel surcharge, RASK for 4Q15 would have been up further at 59% on-year while average fare would have been up by around 26% on-year.
Profit before tax was RM434.51mil compared with loss before tax of RM391.98mil a year ago.
Elaborating on the Q4 FY15 profit after tax , it said there was a 229% increase to RM554.20mil, also boosted by deferred taxation of RM124.65mil. This was in contrast with the net loss of RM428.51mil a year ago.
“The growth in 4Q15 net profits is mainly attributable to the revenue growth during the quarter of 47% and a 21% reduction in the average fuel price from US$95 per barrel in 4Q14 to US$75 per barrel in 4Q15,” it said.
For FY15, its earnings of RM540.96mil was a sharp 553% increase from the RM82.84mil in FY14. Revenue increased 15% to RM6.30bil from RM5.41bil, supported by a 10% growth in passenger volume despite the lower average fare of RM157 in 2015
Ancillary income per passenger increased by 2% to RM47 on-year. The seat load factor was at 81% which was 2 percentage points higher than a year ago.
“Despite the improvements in revenue and operating profits for the year, profits before tax of the Group was negatively impacted from the recognition of current and prior year losses of Indonesia AirAsia of RM797.7mil in 2015,” it said.
AirAsia Berhad CEO, Aireen Omar said, “It was a very good quarter indeed for the Malaysian operations. The increase in RASK (including and excluding fuel surcharge) proved that lower fares stimulate the market as seen by the significant increase in the number of passengers that travelled with AirAsia who also received a windfall due to the removal of fuel surcharge”.
Ancillary revenue rose 14% on-year with the highest contributor coming from baggage (43% of total ancillary revenue) followed by cargo (10% of total ancillary revenue) and insurance (7% of total ancillary revenue).
The highest growth seen among the ancillary products were AirAsia Insure (up 43% on-year) and connecting fees for our “Flythru” service (up 56% on-year). These led to the Company recording an ancillary income per pax of RM49 this quarter (up 4%), “close to our near term target of RM50”.
AirAsia’s cost, measured in terms of cost per available seat kilometre (CASK) rose 4% on-year to 14.06 sen.
The slight increase in CASK was due to an additional 16 sale and leaseback aircraft undertaken throughout 2015 which led to an increase in aircraft operating lease expenses of 148% on-year.
Maintenance and overhaul expenses increased by 53% on-year. The decline in overall fuel expense by 15% on-year was on the back of 21% lower average fuel price at US$75 per barrel as compared to US$95 during the same period last year. This is despite the 7% increase in fuel consumption due to the increased number of flights and longer average stage length.
AirAsia Group CEO Tan Sri Tony Fernandes said: “In Malaysia, we are benefiting from the weaker currency environment that has led to local consumers trading down when going on their travel and other nationalities looking at Malaysia as a value for money holiday destination. Regional destinations are also more appealing as compared to higher currency destinations such as Europe and North America”.
On the outlook of cost environment, he said, “As seen in 4Q15, we are beneficiary of the low fuel price. As of now, the group has hedged 52% of its fuel requirement for 2016 at an average cost of USD59 per barrel on jet kerosene. Passing on this benefit to our passengers through the removal of fuel surcharge earlier last year proved to be rewarding with demand increasing double digit in 4Q15.”
