Tuesday, January 5, 2010

CEO: AirAsia ends 2010 with record sales

31 December 2009

PETALING JAYA: AirAsia finished the last month of 2009 with “record sales” while forward bookings for the first two months of 2010 are looking very strong, said its group chief executive officer Datuk Seri Tony Fernandes.

“We cannot reveal our fourth quarter financial numbers yet but from a sales point, we have had record sales for December and it has been the best month ever in the history of the airline in all the three countries (Malaysia, Indonesia and Thailand) that we operate in.

“January sales are better than what we have seen before and sales in February, with the Chinese New Year (coming), are looking very strong,’’ Fernandes told StarBiz yesterday.

December is traditionally a strong month for AirAsia.

Traditionally, December is a strong month for AirAsia and most other airlines.

At the end of today, the budget airline would have carried a total of 24 million passengers, and when combined with its sister airline AirAsia X, the total is over 25 million.

“That makes us one of the larger airlines in the region,’’ he said.

Maybank Investment Bank Bhd has forecast RM160mil in net profit for AirAsia for the last quarter of 2009 while consensus estimates by analysts compiled by Bloomberg indicate RM77.4mil.

For full-year net profit, the Bloomberg consensus estimate is RM500mil while Maybank Investment’s forecast is higher at RM580mil.

“We expect them to perform very well in the fourth quarter and this may not be (reflected) in the consensus estimates.

“But if you stick to the fundamentals of crude oil (pricing) and historical trend of passenger (loads) for AirAsia, we expect the airline to post a very strong fourth quarter,’’ Maybank Investment Bank senior analyst Khair Mirza said.

While other airlines were struggling through the economic downturn, AirAsia pushed ahead and expanded, strengthening its network and the “investment is now paying off as the economy recovers,’’ Fernandes said.

He added that “the real joy for me is to see AirAsia Thailand and AirAsia Indonesia both experiencing a strong turnaround’’.

Fernandes is bullish on 2010, saying it will be a “very promising year for us’’.

The airline’s operational cost is the lowest in the world while its flexible fare pricing allows it to deal with any fuel shocks. And as its routes mature, it is in a position to raise fares.

Fares will certainly go up as the economic recovery lifts demand for air travel. “Even a RM10 rise in airfares will be good for us as we fly more than 25 million passengers a year,’’ Fernandes said.

“We have a strong balance sheet, our cash is growing and all our airplanes for next year have been financed, so that is why we say 2010 could be an even better year for us.

“Even the contribution in passenger loads and profits from our Indonesian and Thai operations will be much in 2010,’’ he added.

Fernandes also expects AirAsia X to break even this year, with the airline increasing frequencies to existing destinations and ply new routes such as New Delhi, Mumbai and Paris.

But the US is certainly not on its radar screen for 2010.

“We are also modifying the seats for AirAsia X as we now have another supplier for the seats and this will make the planes more comfortable,’’ he said.

Industry-wise, he reckons that the “bottom has arrived and while we did well at the bottom, the economic recovery will be great for us’’.

Meanwhile, AirAsia will fly to Balik Papan and other routes in Indonesia, along with Hyderabad and Bangalore next year.

“Whatever skeptics have said over the past eight years, we will say we are in a good position now as all our investments made in terms of airplanes, people and branding are beginning to pay off,’’ Fernandes said.

By B.K.Sidhu

The Star

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