An AirAsia plane sits on the tarmac at Kuala Lumpur International Airport, Malaysia August 28, 2016. REUTERS/Edgar Su/File Photo GLOBAL BUSINESS WEEK AHEAD PACKAGE - SEARCH 'BUSINESS WEEK AHEAD 21 NOV' FOR ALL IMAGES
KUALA LUMPUR: AirAsia Bhd, which on Thursday reported a third-quarter net profit of RM353.89mil against a loss of RM405.73mil a year earlier, expects to dispose its leasing arm, Asia Aviation Capital Ltd (AAC), next year.
Group CEO Tan Sri Tony Fernandes said bids were coming in for AAC worth some US$1bil, with the eventual sale of the unit to take place in early 2017.
He said the company had earlier announced that it wanted to streamline its business and dispose of non-core business, such as AAC.
“Bids are coming in December 2016 with eventual sale to take place in early-2017. We will go to the markets with two potential initial public offerings; our flight crew training centre, AirAsia Academy (AACE) will be listed in Kuala Lumpur and Asean Holding Co in Hong Kong,” he said in a statement.
The budget airline sees strong demand to sustain its performance for the rest of the year.
“We remain confident as we are continuing to observe strong demand across most sectors due to the year-end holidays and festivities. This is coupled with a favourable fuel price environment,” AirAsia said in a filing with Bursa Malaysia on Thursday.
AirAsia’s revenue in the third quarter (Q3) ended Sept 30 rose to RM1.68bil compared with RM1.51bil in the same period last year. Its earnings per share for the quarter stood at 12.70 sen against a loss per share of 14.60 sen.
The revenue was supported by a 5% growth in passenger volume while the average fare was up 4% at RM164 compared with RM157 a year ago. Ancillary income per passenger remained consistent at RM46 year-on-year. The seat load factor was at 89% which was 7 percentage points higher than the same period last year.
“The growth in third quarter net profits is mainly attributable to the revenue growth during the quarter of 11% which was mainly due to the increase in aircraft operating lease income and a 22% reduction in the average fuel price from US$79 per barrel in third quarter 2015 to US$62 per barrel in third quarter 2016,” it said.
For the first nine months to Sept 30, AirAsia’s net profit surged to RM1.57bil, or 56.50 sen earnings per share compared with a net loss of RM13.37mil, or 0.5 sen loss per share.
Its revenue for the period rose to RM5bil against RM4.13bil.
Thai AirAsia, which is a 45% associate owned by AirAsia, posted revenue of 8,160.7 million baht (RM1.01bil) in the third quarter of 2016, 12% higher compared to the 7,268.2 million baht (RM896.8mil) achieved a year ago.
Its net profit rose to 729.2 million baht (RM89.96mil) in Q3 2016, compared to a net profit of 174.4 million baht (RM21.51mil) in Q3 2015.
Indonesia AirAsia recorded revenue of 1,095.2 billion rupiah (RM355.2mil) in third quarter 2016, 26% lower as compared to the 1,483.7 billion rupiah (RM461.2mil) achieved in Q3 2015.
It said the lower revenue was mainly due to the reduction in fleet size.
It made a net profit of 486.6 billion rupiah (RM157.8mil) in Q3 2016 against a net loss of 262.1 billion rupiah (RM85.1mil) a year earlier.
Fernandes said AirAsia remained beneficiaries of the low fuel price, with all associates observing lower aircraft fuel expense, leading to lower cost per available seat kilometre (CASK) for the group.
“For the fourth quarter 2016, we have hedged 70% of our fuel requirements as a group at an average cost of US$59 per barrel jet kerosene.
“Meanwhile, we have hedged approximately 74% of our 2017 fuel requirements at an average cost of US$60 per barrel jet kerosene,” he said.
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