AirAsia X Bhd reported a net loss of RM11.28mil for its first quarter ended March 31, compared with a net profit of RM50.20mil in the previous corresponding period due to higher operating expenses.
The airline said the higher operating expenses was mainly due to staff costs which increased 56.9% to RM71.6 million from RM45.6 million a year ago and depreciation of property, plant and equipment which increased by 66.4% to RM44.6 million compared with RM26.8 million a year ago, mainly due to the acquisition of A330-300 aircraft under finance lease.
Fuel costs also increased 76.9% to RM401 million in Q1 FY14 from RM226.7 million a year ago while maintenance, overhaul, user charges and other related expenses increased by 53.4% to RM144.9 million from RM94.4 million a year ago.
"After Q1 FY13, the company has taken delivery of six Airbus A330-300 under operating lease and hence aircraft operating lease expense increased 58.6% to RM59.9 million in Q1 FY14 from RM37.8 million a year ago," it said.
Revenue for Q1 FY14 rose 40% to RM749.5 million from RM535.3 million a year ago due to higher revenue from scheduled flights, charter flights, fuel surcharge, freight and cargo as well as ancillary revenue.
Revenue from passenger seat sales on scheduled flights increased by 19.5% to RM423 million for Q1 FY14 from RM353.9 million a year ago, mainly due to an increase of both available seat kilometres (ASKs) and revenue passenger kilometres (RPKs).
"Our passenger load factor has increased to 85.8% in the Q1 FY14 as compared with 84.2% for Q1 FY13. Average passenger fares decreased 25.1% to RM467.11 in Q1 FY14 compared with RM623.53 in Q1 FY13 primarily due to the promotional fares on our newly launched routes during financial year ended Dec 31, 2013 (FY13) which include Busan, Shanghai and Adelaide."
Revenue from charter flights increased to RM62.9 million in Q1 FY14 from RM15.6 million a year ago due to more charter contracts secured while revenue from fuel surcharge increased to RM81.8 million in Q1 FY14 from RM49.8 million a year ago due to higher number of passengers flown.
Revenue from freight and cargo increased 27% to RM25.3 million from RM19.9 million a year ago while ancillary revenue, including AirAsia Insure, increased to RM150.1 million from RM97.3 million a year ago.
As of Q1 FY14, AirAsia X's seat capacity grew 63.1% to 1,257,295 from 770,965 a year ago and passengers carried increased 66.9% to 1,080,763 from 647,366 a year ago while load factor improved 1.6% to 85.8% from 84.2%.
The company expects its prospects to remain positive based on its positioning within the Asia Pacific region which allows AirAsia X to benefit from the region's growth and continue to be a large and attractive feeder market for its long-haul routes.
"As the company has strategically embarked on a major capacity expansion phase with new aircraft deliveries added to our fleet, our ASK capacity will be growing above 30% year-on-year from Q3-2013 to Q3-2014. We expect short-term earnings pressure during this period from lower yields contributed by a higher portion of promotional fares to stimulate new demand creation to fill up the new capacity."
"Our experience suggests that new capacity typically takes about 12 months to break-even. We believe the additional capacity will generate a stronger market share and route network, and deliver long-term benefits from scale advantages relative to our competition," it said.
