AirAsia in good financial position

Aireen (left) at the send-off ceremony of AirAsia’s inaugural flight from Penang to Yangon, Myanmar.
BAYAN LEPAS (Penang): AirAsia Bhd is in a good financial position for its upcoming financial year ending Dec 31, 2016 (FY16), thanks to low crude oil prices and the timeliness of the airline’s hedging practices against the commodity.
Its chief executive officer (CEO) Aireen Omar reiterated the statement made by AirAsia’s group CEO Tan Sri Tony Fernandes, which was reported in The Economic Times of India, that oil prices, which are currently trading at levels of US$41.54 (RM166.16) for Brent Crude Futures, “will stay where it is”.
Fuel costs account for a significant portion of AirAsia’s operational cost, therefore, lower prices will help enhance the airline’s profitability.
“We are confident of good [financial] growth in 2016; low oil prices are fantastic for operations, and the fact that we didn’t hedge a lot earlier before the oil prices came off resulted in us not being subjected to high hedges, unlike other airlines, “ she told reporters at a news conference yesterday in conjunction with Air Asia’s inaugural flight from Penang to Yangon, Myanmar.
For FY15, AirAsia’s net profit grew more than sixfold to RM540.96 million from RM82.8 million in FY14, while revenue came in at RM6.3 billion in FY15, up 16.3% from RM5.4 billion the previous year.
AirAsia has also been vocal in its dissatisfaction with the operating conditions at klia2, which is operated by Malaysia Airports Holdings Bhd (MAHB).
On July 31 last year, the low-cost carrier issued a letter of demand to MAHB and its subsidiary Malaysia Airports (Sepang) Sdn Bhd , seeking RM409 million for losses and damages as a result of its operations at the new budget terminal klia2 as well as from the earlier low-cost carrier terminal (LCCT) in Sepang.
Malindo Air, which was also a tenant at klia2, had moved its operations to KLIA effective from March 15 this year.
“The number of passengers per day departing from klia2 only coming from AirAsia averages to about 37,000 per day, and 45,000 per day during the peak periods ... if you include both arrivals and departure during the peak period you’re looking at around 80,000 passengers per day, so there is huge volume there,” said Aireen.
With the commencement of its inaugural flight to Yangon yesterday, AirAsia now services seven international destinations via its northern hub of Penang.
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