Sunday, November 22, 2009

Malaysia AirAsia swings to Q3 profit; upbeat on outlook

20 November 2009

* Q3 net profit 130 mln rgt vs loss 465.5 mln rgt yr ago

* Q3 revenue 739.7 mln rgt vs 707.9 mln rgt yr ago

* Q3 passenger volume up 19 pct on-yr, avg fare down 27 pct

* Q3 forex translation gain 24 mln rgt

* Shares end down 2.3 pct at 1.28 rgt ahead of results (adds quotes, comment, details)

KUALA LUMPUR- Southeast Asia's largest budget carrier AirAsia Bhd (AIRA.KL) flagged on Friday a further recovery in air travel demand after reporting a profit in the third quarter, helped by higher sales of non-ticket items.

Airlines globally have struggled in the past year as the economic crisis sapped demand for travel and trade, but budget carriers have largely outperformed as passengers look to cut costs. "Based on the forward booking trend, the underlying passenger demand in the fourth quarter is positive," Tony Fernandes, group CEO of AirAsia, in a statement.

AirAsia booked a net profit of 130 million ringgit in July-September, against a loss of 465.5 million ringgit a year earlier.

AirAsia's average fare fell 27 percent to 142 ringgit in the third quarter, but the 86 percent jump in ancillary income, or income from sources other than ticket sales, more than offset the lower fares.

Ahead of the results, 16 analysts polled by Thomson Reuters I/B/E/S forecast that AirAsia will book a full-year net profit of 521.5 million ringgit versus a loss of 471.7 million in 2008.

Singapore Airlines (SIAL.SI) and Korean Air Co (003490.KS), two of Asia's biggest airlines, last week flagged a recovery in travel demand after their quarterly results showed some signs of improvement. [ID:nSP492399]

"While the airline industry is facing arguably the most difficult environment in recent memory, we see vast opportunities to grow our business," Fernandes said.

The budget airline will launch several new routes over the next 12 months, including to several Indian cities, he added.

AirAsia has secured 20 percent of the airline's fourth quarter fuel needs at an average fixed swap rate of $74.98 per barrel.

Analysts said AirAsia is well-positioned to benefit from more tourist traffic into Singapore when the two integrated casino resorts open their doors to the public in early 2010.

AirAsia's share price has gained 48 percent since the start of the year, in line with the 45 percent rise in the broader market index .KLSE.

Out of 18 analysts tracked by Thomson Reuters I/B/E/S, nine had strong buy or buy calls for AirAsia. (Reporting by Julie Goh; Editing by Lincoln Feast)

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