AirAsia Says Second-Quarter Passenger Traffic May Jump 21%

29 May 2009

AirAsia Bhd., Southeast Asia’s largest low-cost airline, said second-quarter passenger traffic is headed for a 21 percent jump, matching last quarter’s increase as budget-conscious travelers look for cheap air fares.

“For the moment, things are rosy,” Chief Executive Officer Tony Fernandes said in a Bloomberg Television interview from Kuala Lumpur today. The “second-quarter demand looks good.”

Profit at the Sepang, Malaysia-based airline climbed 26 percent in the first quarter to 203.2 million ringgit ($58 million) after the company flew more passengers and added new routes. The carrier’s surging traffic contrasts with slumps at regional rivals including Singapore Airlines Ltd., which is cutting routes and capacity.

The airline expects to fly 24 million people this year, Fernandes reiterated today, as the company adds routes in India and expands flights to existing destinations in China. AirAsia, which has ordered 175 Airbus SAS planes, is increasing its capacity by about 20 percent each quarter, he said.

AirAsia may be considering a 500 million-ringgit rights offer to raise funds to pay for new aircraft, CIMB Investment Bank Bhd. said in a report today. Any rights issue isn’t imminent, CIMB said. Fernandes declined to comment on the report.

AirAsia today rose 1.6 percent to 1.27 ringgit at 10:56 a.m. on the Kuala Lumpur stock exchange, set for the highest close in more than a year. Malaysia’s benchmark Composite Index added 0.5 percent. The airline’s first-quarter results were released after the market closed yesterday.

Growth at the airline contrasts with declining passenger numbers worldwide. Global airline passenger traffic fell 3.1 percent in April from a year earlier, according to the International Air Transport Association.

AirAsia, which currently flies to one destination in India, will fly to at least six more airports in the South Asian nation before the end of 2009, Fernandes said.

“India’s going to be a big play for us this year,” he said. “We’re not going to slow down our expansion.”