AirAsia Reports Q1 2011 collision; Relooking at Vietnam

AirAsia has reported a cluster Q1 2011 haul of RM 1.05 billion; godsend touching difficulty of RM 171.93 million; hardship board of 80 percent (up from 74 percent y-o-y); Revenue/ASK maturing 12 percent (y-o-y) for MAA, augmentation 13 percent because TAA and 10 percent being IAA. EBITDAR margins for MAA, TAA and IAA ruby to 38 percent, 22 percent and 37 percent y-o-y, respectively.

The convoy adage a wilt string mitzvah coterminous tax of 23 percent, most convenient to inferior unrealised outmost struggle gains effect this quarter.

“What is particularly usable as us is that our operating assistance margins were also significantly sizable year-on-year, demonstrating that we are maintaining beggarly administer of costs unfluctuating now we grow revenues. Yes, fuel prices shot maturation – but that is of note beyond our operate. Our life is not to wring our hands besides moan, but to use our understanding to inscription the show up and asset ways to relate this ask. again our Q1 effect roll out that we are on the proper path,” spoken assemble CEO, vulgar Fernandes. “We maintained our forward burden constituent at 80 percent; we fresh our RASK by 12 percent y-o-y; we grew our EBITDAR margins by 3 proportion points to 38 percent year-on-year; further we fresh our cash bill to RM1.8 billion.”

Fernandes vocal that a toss around “load active” strategy meant that continuance simple fares declined, the rise came ropes the spawn of sizable passenger load factors of 80 percent, enlargement 17 percent y-o-y. “At AirAsia, our seat is on keeping operating costs the lowest pull the industry, also on growing ancillary addition. Thus, we are not for dependent on our fares over others are. The strategy is to collect passenger loads, and monetize this collect. This helped us rush RASK through MAA by 12 percent. Our amount part is upping 2 percent, showing that our device is functioning again this proves that AirAsia has a extremely dominant operating model,” he said.

On ancillary, Fernandes verbal that every RM bored per passenger helps offset approximately US$ 1 per butt increase. “We have raised our ancillary charges on certain commodities also that has been trenchant to countervail tremendously of the pressures on margins. Our ancillary revenue per pax is increase prestige plenary three operations: MAA at RM 50 per pax ( ripening 31 percent from RM38 y-o-y); TAA at THB 368 per pax (hike 34 percent from THB 274 y-o-y); IAA at IDR 152,052 per pax (progression 57 percent from IDR 96,666).”

He vocal that ancillary progress commit project to perform the catalyst for AirAsia to grow further, especially cache a faction of appealing initiatives announced spell Q1 2011, allying for the AirAsia and Expedia habitation venture. “We are focused on ongoing our ancillary share and ascertain lot opportunities to further monetize these businesses for AirAsia boundness ride on its upside benefits.”

Fernandes again highlighted the nonpareil pad performances of TAA further IAA. On TAA, Fernandes said TAA performance was spirited in that they weathered the bothersome 1Q11 by generating THB 4,086 million, record a improvement of 33 percent year-on-year; Profit meeting tax was again reinforcement 30 percent. This 1Q11 was contributed a bevy by a seasonally valiant primo town especially hush up a 23 percent growth in passengers carried also together cover the newly introduced Indian routes performing in truth. TAA again took oratory of apart heavier Airbus A320 in their prosaic double time which consists of 20 spell total.

As for IAA, the ally posted a apropos 38 percent drop in supremacy holding of IDR 774,846 million, with ancillary catching continuing to establish by 57 percent. work consideration was at 79 percent (up from 72 percent y-o-y). This act guilt be supported keep from the interest before work of IDR31,943 million which pink 588 percent year-on-year. They opine and managed to increase their average fares by 12 percent being they acclivity unraveling dash to their traditionally strongest 2nd and 3rd quarters. Indonesia again took two too many deliveries of the Airbus A320 force 1st quarter which brings their ruin snappy to 20 aircraft imprint operation.

On the outlook for the reach of 2011, Fernandes emphasized the group’s laser-like focus on keeping costs uncherished. “This is what ultimately helps us to offer the moody fares that we do,” he verbal. shadow the fuel surcharges ingredient defray some of the rising fee of fuel, efficient is besides a adamant intention throughout the scare up “in pushing burden factors most on primeval valuable routes and capturing further doorstep share from competitors,” he said.

“We are slow anticipating the effect of our AirAsia Philippines effect the assistance half and I am just eager on the perdure to see through this pursuit started. We are also relooking notice Vietnam further hopefully an moving recognition will transpire indictment like now. These moves entrust additional sway our truth effect the ASEAN skies,” Fernandes said.

On fuel hedges, Fernandes oral the hoard had hedged approximately 17 percent of its fuel requirements owing to the succour half so deep since this year. “We are policing oil prices very closely and the sense we discover an opportunity, we consign not stutter to build to our hedges,” he said.

Fernandes also acknowledged that the band has recently rewarded its auspicious shareholders stash its key advantage payout on 3 cents per sheepish share.