AirAsia X profits dip in 2013

AirAsia X experienced a small decline in profits last year, as a extra capacity and a weak Malaysian ringgit impacted the airline’s figures.

The long-haul low-cost carrier generated pre-tax profits of MYR35.7 million (US$10.9m) in 2013, 27% lower than the previous year. Full-year revenues actually climbed 17% to a record MYR2.31 billion, but AirAsia X said that “lower than expected yields and the appreciation of the US dollar against the ringgit” hit the carrier.

The airline experienced a 17% jump in passenger traffic last year, measured in revenue passenger kilometres (RPK), while seat capacity climbed 19%. This led to a slight dip in average load factors, to 82.1%.

“Despite challenging market conditions, we seized the opportunity to invest [in] substantial capacity to strengthen our market position in our core markets to ensure we remain the world’s largest long-haul LCC operator,” said Azran Osman-Rani, CEO of AirAsia X.

“We believe the short-term earnings pressure arising from newly-introduced capacity will be well worth the long-term strategic value as yields rise with the maturing of this new capacity. Despite a similarly large capacity increase in 2014, we are already seeing signs of yield improvement from our forward sales,” he added.

This additional capacity came in the form of seven Airbus A330-300s, which were delivered to AirAsia X in 2013. This contributed to a higher lease expenditure of MYR186.7m. The airline also placed a firm order with Airbus for 25 more A330-300s last year.

Six new destinations were launched in 2013: Shanghai, Busan, Adelaide, Jeddah, Colombo and the Maldives.

In 2014 the group is now planning to launch its first regional subsidiary, Thai AirAsia X, which will be based alongside Thai AirAsia at Bangkok’s Don Mueang International Airport.