KUALALUMPUR (Reuters) – Malaysia’s AirAsia Group Bhd <AIRA.KL> reported a record net profit in the first quarter mainly helped by the disposal of a ground handling services unit.
Net profit for the three months to March 31 jumped 85 percent to 1.14 billion ringgit (£214.55 million) on revenue up 14.8 percent to 2.56 billion, the budget airline said in a bourse statement on Thursday.
It saw two one-off gains totalling 884.7 million ringgit from the disposal of its interest in Ground Team Red Holdings Sdn Bhd which was completed in January.
“The gain however was partially offset by current and deferred taxation charges of 104 million ringgit in the current quarter,” the airline said.
AirAsia reported an unchanged unit cost for the quarter despite a 9 percent rise in average fuel price to $83 per barrel and higher maintenance expenses during the quarter, helped by higher aircraft utilisation and route rationalisation.
To mitigate cost pressures, the group said it is driving more ancillary sales and ensuring better performance by all associate airlines.
Its passenger volume rose by 16 percent but lagged a 19 percent increase in capacity, knocking its load factor by 2 percentage points to 87 percent, in line with expectations for the season.
AirAsia also projected an average load factor of 87 percent for the second quarter.
“In order to better serve the growing demand in the region, the group is also planning for a net increase of additional three aircraft through operating leases in the second quarter,” the airline said.
Group CEO Tony Fernandes said in a statement that the group will be undergoing a secondary listing exercise for its Indonesia operations this year. “We are also on track to list AirAsia Philippines in the second half of 2019.”
Fernandes, who built AirAsia up from a two-plane operation in 2002, is now targeting rapid expansion in its core Southeast Asian markets.
The group has also segregated its businesses into airline transportation and digital divisions to provide better clarity and business focus in each division.
Last week, Fernandes accused industry regulator, the Malaysian Aviation Commission of pressuring the airline to cancel flights meant to transport voters home for a recent general election that saw the defeat of Malaysia’s long-ruling coalition.
The regulator has denied the allegation and filed a police complaint against Fernandes.
AirAsia shares closed down 1.2 percent on Thursday, while the local stock market <.KLSE> fell 1.6 percent.
(Reporting by Liz Le; Editing by Himani Sarkar and Jason Neely)