KUALA LUMPUR (Nikkei Markets) - Malaysia's AirAsia, the largest discount carrier in Southeast Asia, said Thursday its first quarter net profit surged 85.4% on year thanks to gain from selling stake in a unit.
Net profit for the three months ended Mar. 31 climbed to 1.14 billion ringgit ($286.91 million) from 615.81 million ringgit a year ago, the airline said in an exchange filing. The company said it recorded a gain of 350.3 million ringgit from disposal of interest in Ground Team Red Holdings.
Quarterly revenue grew 14.8% year-on-year to 2.56 billion ringgit thanks to increase in total passengers carried. The airline's load factor, a measure of how full their planes were with paying passengers, was 87% in the first quarter compared to 89% year ago period.
"The group is projected to achieve an average load factor of 87% in the second quarter of 2018 based on the existing forward booking trend," AirAsia said. The company is planning for a net increase of three aircraft through operating leases in the second quarter of 2018, it added.
During the quarter, AirAsia operated 123 aircraft and 67,556 flights, a 19% increase when compared to the same period last year. The company added three new routes in Indonesia, four new destinations from Philippines, and increased frequencies on 13 routes in Malaysia.
In the first quarter, passenger traffic grew 16% in Malaysia and Thailand. In Philippines, traffic climbed 39%. Traffic at India and Japan operations surged more than 70% but fell 2% in Indonesia as volcanic eruption of Mount Agung in the highly-popular Bali island forced cancellation of dozens of flights.
In Thailand, load factor in the second quarter of 2018 is expected to come in at 84%, AirAsia said. The airline said it will focus on strengthening its marketing activities to promote China and India routes in the remaining quarters.
AirAsia said it will introduce new routes and increase frequencies in India where load factor forecast for the next quarter is at 86%. AirAsia Japan will focus on "building footprint in the domestic market and connecting to existing network within the region," the airline said, while predicting a 76% load factor.
"Barring any unforeseen circumstances, the board remains positive that the overall results of the group in 2018 may be better than 2017," AirAsia added.
The upbeat comments from the company come at a time when jet fuel prices have been climbing along with crude oil prices. Jet fuel averaged $78 a barrel in the first quarter this year compared with $65.6 a barrel for the whole of 2017, according to the International Air Transport Association.
Shares of AirAsia ended 1.2% lower at 3.23 ringgit apiece on Thursday, while FTSE Bursa Malaysia KLCI fell 1.6%.