AirAsia X Bhd’s (KLSE:AAX) net profit jumped to RM47.44 million in the second quarter, up from RM1.02 million the previous year. The gain is attributed to forex gains and deferred tax.
The carrier, which announced its earnings to Bursa Malaysia yesterday, is still seeing pressure on its operating profit due to increased expenses, including fuel.
Year-on-year, AAX reported a 65% decline in operating profit, down to RM6.98 million. The carrier’s bottom line was boosted partly by a forex gain on RM31.90 million in borrowings. Higher deferred taxation also allowed the carrier to see higher net profit.
For the first time ever in a second quarter, the carrier crossed the RM1 billion mark in revenue. Year-on-year, revenue rose 17%to RM1.036 billion. A 34% increase in passengers helped boost revenue along with a 26% rise in seat capacity.
Load factor increased by 5% to 80%, but average fare was 14% lower due to the carrier’s efforts to boost demand.
“We are pleased that despite challenging market conditions, we still managed to deliver the numbers in what was historically a lean quarter which again attests to the commercial viability of the long-haul low-cost model,” said Datuk Kamarudin Meranun, CEO, in a statement.
News of the company’s earnings comes as the carrier expressed interest in selling its training academy and its leasing unit.
The carrier said that it will sell its 50% stake in Asian Aviation Centre of Excellence for $100 million.
“AirAsia is rich in assets but our core business is passenger service and ancillary,” said Chief Executive Tan Sri Tony Fernandes. “We will continue to regularly dispose of non-core investments.”
Asian Aviation Centre was established in 2011 to provide training services to cabin crew members, pilots and ground service staff.
CAE International Holding, a Canadian aviation company, will purchase AirAsia’s stake.
AirAsia’s sale of its stake in the training academy is also part of the carrier’s plan to monetize its holdings.
The company is also in the process of selling its 25% stake in AAE Travel. AAE operates the online travel booking site Expedia.
Fernandes also said on Thursday that the sale of its leasing unit to a South Korean group was “imminent.” The chief executive said there are no apparent roadblocks in the transaction.
KOTAM, Korea Transportation Asset Management, is reportedly negotiating the terms to acquire AirAsia’s unit Asia Aviation Capital. The deal was first reported by Reuters in March.