AirAsia makes record profit in 2009

Despite 2009 being regarded as the worst year in the history of the aviation industry, AirAsia has announced net profits of RM549 million for the full year.

AirAsia Group CEO Tony Fernandes announced that the company’s revenue for the year was higher by 11.5% at RM3,179 million, with passenger growth registering a 21% increase to 14.2 million for the Malaysian operation. The combined Malaysian, Thai and Indonesian operations carried 24% more passengers, totalling 22.7 million.

“We have successfully grown market share in every market we serve, opened up four new bases (Penang, Bandung, Phuket and Surabaya), launched new routes and amassed RM748 million cash in the balance sheet as a bulwark against any contingencies that may arise.,” Fernandes highlighted.

On the operations in Thailand and Indonesia, Fernandes said AirAsia Thailand had captured substantial market share and delivered a core operating profit of THB334 million (RM34.1 million). “The demand for air travel in Thailand has recovered after a prolonged period of challenges. The outlook for the first quarter remains strong with high passenger traffic, strong load factor and better yields. The Thai operation is enjoying the cost benefits of the increased number of Airbus A320 aircraft in its fleet,” he reported.

On AirAsia Indonesia, Fernades remarked, “Indonesia is in the final stage of its aircraft renewal programme and this will help to enhance operational reliability, increase capacity and substantially reduce operational cost. As Indonesia receives more Airbus A320s, it will replicate the cost advantages in Malaysia and is on course to deliver sustainable profits for the full year 2010.”

Commenting of the fourth quarter results, Fernandes said, “AirAsia produced revenue of RM894 million with a core operating profit of RM119 million in the fourth quarter. This result stems from 19% passenger growth to 4.0 million and a strong contribution from ancillary income. Passenger load factor rose 1% from the same period last year to 79.4%. Average fare fell by 23% to RM176 as we continue to provide exceptional value to our customers without sacrificing profits. Unit cost was down by 14% thanks to lower fuel price and benefits of economies of scale."

Looking ahead, Fernandes was optimistic regarding AirAsia’s prospects in 2010. “There are early signs that the global economy is stabilising and the benefits are already visible in the aviation industry. Passenger traffic is growing, particularly in the [low-fare airline] segment. The supply-demand conditions are favourable to upward revision of fares in certain sectors. AirAsia is ideally positioned to grow traffic as Asia is leading the way out from the global economic downturn.

“We have identified nine new routes to be launched and this will support passenger growth of 11%-14% in 2010. Based on the forward booking trend, the underlying passenger demand in the first quarter 2010 is positive,” Fernandes said.

The Group CEO added that current conditions provide AirAsia with an opportunity to review, re-evaluate and restructure its internal operations and build on its strong foundations so as to benefit fully from the reviving economy. “We’re fine tuning the current route network to extract higher yields. We’re also set to become an all-Airbus fleet throughout the Group by the third quarter – which will help lower operational costs, increase capacity and give us a clear edge over the competition,” he said. In addition, AirAsia’s joint collaboration with Australia’s Jetstar (and Jetstar’s parent, Qantas) in operational aspects such as procurement, engineering and ground handling is expected to contribute substantial savings, he said.