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AirAsia reports double-digit sales growth in Q3

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CEO Tony Fernandes promises 2017 will be even more “exciting”.

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KUALA LUMPUR – AirAsia’s third quarter earnings improved substantially, the company reported Thursday.

Net profit for its Malaysian operations between July and September was RM353 million compared with a net loss of RM405 million a year ago.

The Nikkei Asian Review (NAR) quoted Tony Fernandes, AirAsia’s group chief executive, as saying that 2017 would be an “exciting year” because the company was strengthening inflight WiFi services and entertainment.

Such endeavours are expected to boost ancillary income from the current RM46 per passenger to RM60, the report said.

NAR reported AirAsia as saying in a press release that revenue grew 11% on the year to RM1.68 billion for the third quarter.

This, it said, was largely due to stronger demand for travel to regional destinations in the wake of a weakening ringgit that discouraged long-distance flights to Europe or the US.

On a consolidated basis that included contributions from units in Thailand, Indonesia, the Philippines, India and Japan, AirAsia said revenue grew 6% to RM2.97 billion on profit before taxation of RM403 million.

In the quarter, the number of passengers carried rose 11% to 14.23 million, contributing to sales growth across all units except Indonesia and Japan, the NAR report said.

In Malaysia, the load factor improved from 82% to 89%, the highest since its establishment in 2001.

It said units in Thailand, the Philippines and India recorded revenue growth of 12%, 24% and 32% respectively.

In Indonesia, revenue declined 26% but AirAsia said it was on track to be in the black in the second half of 2016 on a turnaround plan to cut capacity and network.

According to the NAR report, AirAsia reiterated plans to dispose of non-core business, Asia Aviation Capital, in early 2017. It said that bids for the unit, which is valued at around US$1 billion, will be received in December.

It also intends to float its flight crew training centre AirAsia Academy in Kuala Lumpur, and Asean Holding in Hong Kong that will hold all operating companies, NAR reported.

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