Business | Automotives

AirAsia may sign 100 Airbus order

Carrier’s second-quarter profit jumped to 1.19 billion ringgit

  • Bloomberg
  • Published: 14:46 August 29, 2012
  • Gulf News

Kuala Lumpur: AirAsia Bhd, the region’s biggest discount carrier, may sign an order for as many as 100 Airbus SAS aircraft at next month’s Berlin airshow after reporting an 11-fold jump in quarterly profit.

Negotiations with Airbus are going “quite well,” Chief Executive Officer Aireen Omar said in a Bloomberg TV interview on Wednesday. The carrier would like to sign the deal in Berlin, she said. The show starts September 11.

AirAsia already has outstanding orders for 272 single-aisle A320s as it adds new ventures across the region and wins travellers with low-cost fares. The carrier’s passenger numbers jumped 10 per cent in the quarter through June and forward bookings remain “strong,” Aireen said.

“The outlook for AirAsia remains positive,” Annuar Aziz and Timothy Ross, analysts at Credit Suisse Group AG, wrote in a report on Wednesday. They reiterated an overweight rating on the airline’s stock and more than doubled their full-year earnings per share forecast.

The carrier’s second-quarter profit jumped to 1.19 billion ringgit (Dh1.4 billion, $381 million) from 104.3 million ringgit helped by a 1.04 billion ringgit one-time gain related to its stake in a Thai affiliate. Net operating profit fell 3 percent to 130.9 million ringgit. The carrier lowered fees for check-in baggage during the quarter, a move it has now reversed, Credit Suisse said.

The company rose 0.6 percent to 3.57 ringgit as of 12:05am in Kuala Lumpur trading after earlier advancing as much as 2.5 percent. The benchmark FTSE Bursa Malaysia KLCI Index advanced 0.1 percent.

‘Good Demand’

The airline is in talks on an order for 50 A320s with 50 options, now-Group Chief Executive Officer Tony Fernandes said in May. It plans to start new destinations while boosting frequencies on several routes within Southeast Asia in the second half, according to a statement yesterday.

“We’ve seen really strong, good demand,” Aireen said. “We definitely need more new aircraft.”

The carrier has grown from its Malaysian roots to establish budget spin-offs in countries including Indonesia, Thailand and most recently the Philippines and Japan. It is also looking at getting an operator’s license in Singapore, Aireen said.

Malaysian Airline System Bhd, the country’s largest long-haul carrier, this month reported net loss that narrowed to 349.2 million ringgit in the quarter, from 526.7 million ringgit a year earlier.

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