AirAsia X reported a 75% drop in its quarterly net profit, despite higher revenue, as it flags a “softer” travel period through September.

For three months ended 31 March, the medium-haul, low-cost operator reported a net profit of MYR80.1 million ($17 million), a sharp decline compared to the MYR328 million profit in the year-ago period. First-quarter EBITDA shrank 42.5% year on year to MYR207 million.

Airasia x a330

Source: Wikimedia Commons

An AirAsia X A330 in March 2020

In briefing slides, AirAsia X says the sharp drop was due to the absence of reversals relating to joint venture tax exposures and travel vouchers.

The airline saw a strong rebound in revenues, which grew 66% to MYR909 million. AirAsia X, which is in the processing of being merged with short-haul sister unit AirAsia, attributes the increase to “strong demand arising from key festive seasons and school holidays” during the quarter.

It carried close to 960,000 passengers during the quarter, up 90% year on year, with traffic and capacity rising 78% and 74% respectively.

The increase in operations ate into the carrier’s costs, as it reported a 79% jump in aircraft fuel expenses to MYR406 million, while MRO-related costs almost doubled year on year.

AirAsia X also reported aircraft depreciation costs of around MYR43.7 million, up 64% year on year.

The airline ended the quarter with 18 Airbus A330s, with two more to join the fleet in July and November.

AirAsia X remains optimistic about its Mainland China network, having increased its operations to cities like Chengdu and Shanghai. It also aims for a “market leadership position” as a foreign carrier operating into China.

Airline chief Benyamin Ismail notes passenger load factors on its Chinese network have stayed around mid-90% since it gradually reinstated flights.

He adds: “In the next two quarters, we are mindful that the Company is entering a traditionally softer travel period based on historical seasonality. However, we are encouraged by recent fare trends and cost structure, as we step up aircraft utilisation to ensure that efficiency is top-tier.”