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AirAsia X network shrink drags Q1 profit down 18%

AirAsia X Group's first quarter operating profit fell 18% to MYR49.6 million ($11.9 million) as it carried less passengers and cut four routes.

Revenue declined 8.1% to MYR1.17 billion during the quarter ended 31 March, while expenses fell 7.6% to MYR1.12 billion despite higher depreciation and maintenance charges.

CASK including fuel was down 3% to MYR0.13, while excluding fuel it was flat at MYR0.82.

Attributable net profit rose 4.2% to MYR44.3 million, as an MYR89 million gain in foreign exchange offset higher financing costs.

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AirAsia X's operating profit fell 18% to MYR49.6 million during the January-March 2019 quarter

AirAsia X

As of 31 March, the company's cash and cash equivalents amounted to MYR255 million, down from the MYR426 million it had on the same date last year, as it made a significant debt repayment of MYR291 million.

The number of passengers carried during the January-March quarter fell 5% to 1.51 million, in line with a 5% decline in ASKs as it terminated services to Tehran, Kathmandu, Male and Auckland. RPKs were down 6%, and seat load factor contracted by one point to 83%.

Indonesia AirAsia X’s operating loss narrowed considerably to MYR3.34 million. Revenue nearly halved to MYR11.4 million, as it transitioned towards charter operations in January.

As that carrier winds down its scheduled operations, the two A330s it previously operated will be wet-leased to a third party from July 2019. This will help to generate revenue and offset its aircraft leasing costs.

Thai AirAsia X's operating profit fell 43% to MYR50.6 million. Revenue grew 28% to MYR510 million, and its profit before tax fell 42.8% to MYR49.3 million.

Commenting on the group's outlook for 2019, AirAsia X Group chief executive Nadda Buranasiri says that the core Malaysian carrier will focus on building its China and Japan network, and grow its market presence in India and South Korea. It will also maintain its fleet of 24 A330-300s until its first A330-900s arrive in late 2020.

Thai AirAsia X will receive five A330s over the remainder of the financial year, including two A330-900s. This will allow the airline to study new network opportunities and launch services to Tianjin in May, Brisbane and Shenyang in June, and Fukuoka in July.

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