AirAsia to add 23 planes to group fleet

AirAsia planes. Bernama file photo

: AirAsia Bhd will add a further 23 planes to the group fleet in the second half of the year and is gearing up to expand the number to 500 by 2027.

This will entail adding 30 new aircraft annually for the next decade.

“I’m confident that we can reach this target or even exceed it, especially with the setting up of our new associate airlines in and in the coming years,” Group Chief Executive Officer, Tan Sri Tony Fernandes said today.

He said the fleet expansion would help solidify AirAsia’s strong position on intra-ASEAN routes and the  domestic markets of , Thailand and the Philippines, where it has been steadily adding .

“In generating returns for our shareholders, we intend to continue to look at deals to monetise our non-core assets and distribute a special dividend biennially.

“We are currently in final negotiations and will materialise the sale of Asia Aviation Capital, our leasing arm before the close of the year,” Fernandes said in a statement after the announcement of AirAsia Bhd’s second quarter financial results here today.

AirAsia had recently announced the sale of its 50 per cent stake in its training centre, Asia Aviation Centre of Excellence (AACE) to CAE for US$100 million. It is also continuously working toward the listing of Indonesia AirAsia and the Philippines AirAsia.

“In summary, AirAsia continues to have an abundant growth story driven by low costs and a strong cash position. We will continue to grow the business to provide good returns to shareholders, in addition to special dividends which will come through the monetisation of our non-core assets,” Fernandes said.

Earlier today, it was announced that AirAsia Bhd’s pre-tax profit had soared 52.4 per cent to RM386.8 million for the second quarter ended June 30, 2017 from RM253.81 million for the same quarter of last year.

Revenue grew 19 per cent to RM2.37 billion from RM1.99 billion, mainly due to a 10 per cent increase in total passengers carried and a strong seat load factor of 89 per cent compared with 87 per cent in the same quarter a year ago.

Fernandes said despite the tougher operating environment in the seasonally weaker second quarter of the year, it managed to serve more passengers and increase the load factor in almost all the markets the airline operates in.

“The consolidated accounts combining our Malaysia, Indonesia and the Philippine units for the second quarter showed we have managed to fight higher fuel costs with strong of 19 per cent year-on-year, resulting in a 37 per cent year-on-year gain in operating profit to RM517 million. After booking a RM56 million net foreign exchange gain, we reported a pre-tax profit  of RM387 million.”

He said both Indonesia AirAsia and the Philippines AirAsia produced stable profits this quarter of RM59 million and RM29 million respectively.

“The financial performance of our Thai associate weakened in the second quarter, but we believe this to be temporary.

“Operating conditions in Thailand were less than favourable during the quarter, but Thai AirAsia emerged the only profitable airline. Our strategy for long term growth in Thailand is to continue to maintain our leading share in the domestic market, while growing our international network. We hope to include Thai AirAsia in our consolidated accounts before year-end.

“Our associate airline in India has grown spectacularly, hitting over one million passengers carried in a quarter after growing capacity 83 per cent year-on-year. We expect AirAsia India to begin to show a sizable profit once international operations take off at end-2018,” said Fernandes.

As for  the balance sheet, the net gearing ratio continued to remain at a desirable level of 1.35 times compared to 1.33 times at end-2016. The  cash inflow from operations was RM419 million, with a cash balance of RM2.07 billion after paying out a final dividend of RM401 million in June 2017. – Bernama

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Source: Borneo Post Online

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