Malaysia's AirAsia sees profit climb despite flat revenue

AirAsia saw its net profit soar by a third in the first quarter after accounting for currency gains and tax credits despite flat revenue from ticket sales, it reported today.

Net profit for the three months ended March rose 33% from a year earlier to 139.7 million ringgit, in large part due to forex gains on borrowings and deferred taxation despite net operating profit sliding by 23% to 126.6 million.

Revenue was flat at 1.3 billion ringgit as average fares paid by customers dropped by 9% although passenger volume was up 4%.

But the budget airline giant's boss Tony Fernandes insisted its average fare was on an upward trend.

"What we see is that the consumers now prefer short-haul travels as compared to long-haul which is beneficial for our business," he said in a statement.

Looking forward, he added that AirAsia had decided to defer aircraft deliveries to 2016 onwards to take advantage of new Airbus A320neos that are 16% more fuel efficient.

The airline, which now has more than 120 A320s and is one of the biggest customers for the European aircraft maker Airbus, is expecting nearly 360 new aircraft to be delivered by 2026.

For 2013, profit fell 55% to 364 million ringgit compared to a year earlier.

Fierce rival Malaysia Airlines announced last week its fifth straight quarterly loss in the first three months of 2013, reeling from the March 8 disappearance of one of its Boeing 777s.

AirAsia has expanded aggressively in recent years, setting up subsidiary budget carriers in Indonesia, the Philippines and Thailand and plans to launch a no-frills joint venture in India.