AirAsia X Berhad (AirAsia X) continues its impressive financial performance, reporting its eighth consecutive profitable quarter. For the Second Quarter of 2024 (2Q24), which ended on 30 June 2024, the company recorded a net profit of RM4.8 million. This achievement comes despite the traditionally weaker second quarter and the absence of its full 18-aircraft fleet.
Strong Financial Performance Driven by Robust Demand
In 2Q24, AirAsia X generated a revenue of RM669.1 million, marking a 30% year-on-year (YoY) increase. This growth reflects the sustained demand in core markets as the company expanded its operational fleet to 16 aircraft. The company also reported Earnings Before Interest, Tax, Depreciation, and Amortisation (EBITDA) of RM58.4 million.
Passenger numbers soared by 42% YoY, with over 880,000 passengers carried, outpacing the 30% YoY growth in seat capacity. The Passenger Load Factor (PLF) was strong at 83%, a seven percentage point increase YoY, with high-demand routes in China, India, and Japan nearing a 90% load factor. Despite the softer travel season, the average base fare was RM458, down from RM650 in the previous quarter.
Growth in Ancillary Revenue and Network Expansion
Ancillary revenue saw a significant increase of over 48% YoY, reaching RM218.2 million. This growth was driven by a 5% YoY increase in ancillary revenue per passenger, rising to RM248. The company attributes this success to continuous product and service improvements, enhanced customer personalization strategies, and the evolution of its inflight food and beverage offerings through SANTAN.
On the network front, AirAsia X reinforced its leadership in key markets by resuming operations to Xi’an in April 2024, expanding its presence in China to five destinations. The company also increased flight frequencies between Kuala Lumpur and Bali to meet the strong demand. Over the past year, AirAsia X has optimized its network by suspending services to Busan, Auckland, and the Gold Coast, focusing on the most profitable routes. The total number of flights in 2Q24 increased by 31% YoY, with an average of 128 weekly flights.
Positive Performance in Thailand and Fleet Expansion
AirAsia X Thailand (TAAX), the company’s associate, reported a revenue of RM378.9 million, a 7% YoY increase, and a net profit of over RM11 million. The number of passengers carried by TAAX rose by 16% YoY to 362,596, with a solid PLF of 84%. The average fare remained strong at RM727 per passenger.
As of the end of June 2024, AirAsia X's total fleet size stood at 18 A330 aircraft, with 16 operational. The company plans to reactivate the 17th aircraft in the third quarter of 2024 and the final aircraft in the fourth quarter. TAAX’s fleet includes eight A330s, with six operational, and plans to operate nine and ten aircraft in the third and fourth quarters, respectively.
Strategic Outlook and Growth Plans
AirAsia X CEO Benyamin Ismail expressed confidence in the company’s growth trajectory, stating, "We expect our remaining two aircraft to rejoin operations by the second half of the year, which will further boost our bottom line. Our network realignment and advancements over the past six months, including the launch of Almaty in Kazakhstan and increased capacity to key destinations, are on track."
He highlighted the strong PLF in Almaty and China, which have maintained around 90% despite the traditionally weaker travel season. The CEO also mentioned the ongoing network review, which led to the suspension of services to Busan, Auckland, and the Gold Coast, ensuring the company focuses on the most profitable routes. AirAsia X's on-time performance was over 91% in June 2024, reflecting its commitment to operational excellence.
Upcoming Acquisition and Fundraising Initiatives
In early August 2024, AirAsia X announced the submission of its listing application and draft circular to Bursa Malaysia Securities Berhad. This submission details the proposed acquisition of Capital A Berhad’s entire equity interest in AirAsia Aviation Group Limited (AAAGL) and AirAsia Berhad (AAB). The company plans to undertake the proposed acquisitions directly, with the exercise expected to be completed by the end of the year. Concurrently, the company’s proposed fundraising of up to RM1 billion is progressing well.
The CEO emphasized the strategic significance of the proposed acquisitions, stating, "The enlarged aviation group will be well-positioned to attract strong interest from investors, leveraging the significant growth potential of our critical aircraft order book. This will pave the way for our ambitions to become a leading player in the global aviation industry."
AirAsia X remains committed to its growth strategy, focusing on market demand, fleet developments, and network optimization. The company looks forward to sharing more details on the proposed acquisitions in the upcoming circular to shareholders.
