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First quarter ancillary boost for AirAsia

Low-cost Asian carrier AirAsia, has announced a post tax profit of £46.4 million for the first quarter of 2010 after a jump of 31% in ancillary revenues.


Announcing its latest figures in a trading update today Air Asia said revenue for the quarter ending March 31, was up by 10% year-on-year to £181.9 million from £165.1 million in the same period of 2009. Passenger numbers hit 3.7 million, a 17% increase, the carrier reported.


It also said the airline registered its highest ever ancillary income with a 31% jump, making up 16% of the company’s overall revenue.


Tony Fernandes, AirAsia Group chief executive, said the airline had plans to further boost this income stream. “We are well on the way to the target of £8.29per passenger that we set ourselves last year,” he said. 


“The numbers reaffirm our conviction that ancillary is a revenue stream that can boost our bottom line and also serve as a buffer to rising fuel prices.”


Load factors for the quarter were 74%, up from 70% year-on-year, despite a capacity increase of 11%.


Fernandes added: “We have a team of creative, passionate, extremely hard-working and loyal staff who constantly come up with ideas and solutions to overcome any challenges thrown our way.”  


And he said he was optimistic about AirAsia’s prospects for the remainder of 2010.


“Forward bookings are looking good and we continue to add routes. We now fly to seven cities in India, making the subcontinent a key player in our growth strategy.”


“There is some concern, of course, that the financial and economic troubles in the Eurozone could become a drag on the global economic recovery.


“We’ll just have to wait and see how that plays out. But Asia, which is leading the world out of the slump and which represents AirAsia’s focus, appears to be showing little signs of a slowdown.


“There’s an increasing demand for air travel, especially in the low-cost carrier segment.”


AirAsia has partially hedged fuel requirements up to December 2010.


“This will help to mitigate some of the oil price volatility and we are monitoring the market and constantly assessing the feasibility of hedging further our fuel exposure in 2010 and beyond,” Fernandes said.


 

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