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AirAsia registers robust performance, defying industry trends

Posted on May 16, 2012, Wednesday

KUCHING: AirAsia Bhd (AirAsia) defied industry trends in the first quarter of 2012 (1Q12) by registering a 12 per cent increase in raw passenger traffic.

According to AmResearch Sdn Bhd (AmResearch), AirAsia defied industry trends in 1Q12, registering a 12 per cent year-on-year (y-o-y) growth in raw passenger traffic to 4.8 million while in terms of traffic in terms of RPK (revenue-passenger per kilometre) grew by nine per cent given shorter average stage length.

Loads were maintained at 80.3 per cent versus 80.1 per cent the same quarter last year.

The research firm noted that growth was driven by the introduction of new routes, such as the KL-Danang, KL-Semarang, KL-Surat Thani and KLPalembang routes. AirAsia’s 1Q12 operating statistics underpin the firm’s view that demand for low cost flights remained resilient compared to full service carriers (FSC).

MAS as a comparison showed a 10 per cent RPK contraction and five per cent load factor deterioration in the second month of 2012.

AmResearch foresaw yield improvement in financial year 2012 forecast (FY12F) driven primarily by the exit of Firefly’s jet operations from November 2011. As a yardstick, AirAsia’s yields grew eight per cent y-o-y in 4Q11, reversing a two per cent-21 per cent y-o-y yield contraction in the past 2 years.

Assuming a seasonal contraction of eight per cent in 1Q versus 4Q (historical three year trend), the research firm estimated 1Q12 yields at 15.5sen per RPK, implying an 11 per cent y-o-y growth.

It also mentioned in the research report despite a 10 per cent higher fuel price y-o-y, the firm estimated that 1Q12 core earnings might register flattish y-o-y growth at RM160 million to RM170 million.

At the research firm’s estimated net profit, AirAsia’s 1Q12 would account for 21 per cent-22 per cent of its FY12F earnings of RM767 million and 17 per cent to 18 per cent of consensus FY12F estimates of RM920 million.

On another note AmResearch mentioned that Thai AirAsia performed well in 1Q12 ‘ RPK with a 14 per cent y-o-y increase, pax traffic increased 17 per cent and load factor increased 1.3 percentage points y-o-y to 85.6 per cent.

Indonesia AirAsia, however, saw loads contract 77 per cent given the initiative to strengthen its Surabaya hub by improving connectivity, resulting in an increase of 19 per cent y-o-y capacity.

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