AirAsia profit down on higher costs and weak ringgit

AirAsia profit down on higher costs and weak ringgit

KUALA LUMPUR - Malaysia-based budget carrier AirAsia has seen its second-quarter net profit fall mainly due to the weakening ringgit and higher costs.

The region's biggest low-cost airline by fleet size said in a statement on Thursday its second quarter net profit was 243 million ringgit ($58.98 million), down by 33.8 per cent year-on year.

The carrier posted a net profit of 367.2 million ringgit in the same period last year.

Its revenue remained mostly flat, rising just one per cent to 1.32 billion ringgit from 1.31 billion during the same period last year.

AirAsia is led by flamboyant boss Tony Fernandes, a former record industry executive who acquired the then-failing airline in 2001.

It has seen spectacular success and aggressive growth under his low-cost, low-overhead model.

Fernandes said he expected Malaysian operations to benefit from higher demand from Chinese passengers, as well as gaining an advantage with some competitors withdrawing routes that AirAsia operates in.

"Starting middle of August, there has been substantial capacity reduction and route cancellations by other players on the routes that AirAsia operates in," he said.

"Demand from Chinese travellers has also recovered starting from May 2015 onwards and with fuel trending favourably for airlines, the stage is set for a good year end for the company."

Loss-making AirAsia X, the long-haul arm of AirAsia, posted on Wednesday a net loss of 132.94 million ringgit.

During the same period last year, it posted a net loss of 128.79 million.

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