AirAsia profit falls 19% on higher fuel, maintenance costs

Written by Reuters | Updated: Feb 27 2014, 09:07am hrs
Malaysia's AirAsia, Asia's biggest budget airline by passenger traffic, saw its fourth-quarter profit drop 19% on higher expenses for fuel and aircraft maintenance.

Net profit for the three months ended December fell to 245.4 million ringgit ($74.78 million), while net profit for the full year stood at 364.1 million ringgit compared with 789.6 million ringgit in 2012 due to the previous year's gain from a disposal of shares in its Thai subsidiary.

The company hopes to reduce costs by another 7.5% this year, according to its group chief executive Tony Fernandes in a press statement, after operating expenses in 2013 rose 6.4% from a year ago.

It will reduce the number of staff as more of its services will be automated; and improve on the sharing of resources with its long-haul arm AirAsia, Fernandes, who is also AirAsia's co-founder, said.

AirAsia, which is also a key customer of European planemaker Airbus, will be deferring 7 aircraft this year and 12 more in 2015 in favour of a more fuel efficient A320 to reduce cost, he added.

AirAsia will take on two new aircraft in Thailand and two in India in the first quarter of this year, when loads might see a boost from the Chinese New Year and school holidays, the company said.

AirAsia will reduce its fleet in its Philippine subsidiary to 14 planes, as it cuts down on domestic routes and builds international connectivity from Manila and Kalibo, it added.