AirAsia Aviation Posts Record Results with More A320s Flying

This week, Capital A, the parent company behind AirAsia, released its unaudited financial results for the three months ending March 31, 2024 (1Q2024). The results cover a diversified range of group companies, including Capital A Aviation Services, Teleport, MOVE Digital and Capital A International.

Some solid results in 1Q

The Capital A Group generated first-quarter revenue of RM5.2 billion ($1.09b) and earnings before interest, tax, depreciation and amortization (EBITDA) of RM1 billion ($0.21b), increases of 107% and 105% compared to the first quarter last year. The Group achieved an adjusted net profit of RM305 million ($64m), a margin of 5.8% for the first quarter.

Photo: AirAsia

Capital A recorded a net loss of RM244 million ($49m), which it attributed to an RM79 million ($17m) finance cost, RM104 million ($22m) depreciation from non-operating aircraft and RM364 million ($76m) unrealized forex loss. Despite those adjustments, the group generated net cash of RM789 million ($166m) from operations.

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AirAsia Aviation Group, including the AirAsia airlines, grew revenue by 121% year over year to nearly RM5 billion ($1b) for the first quarter. The group earned EBITDA of RM958 million ($201m), a 91% year-on-year increase and recorded a record quarterly load factor of 90.4%.

Higher fares and ancillaries

The strong results were achieved with only 78% of the total AirAsia Airbus fleet operating, despite incurring full operational costs without any reversals in provisions as it did last year. Profits were helped by a 19% increase in ancillary revenue to RM57 ($12) per passenger, generating total ancillary revenue of RM879 million ($185M). Ancillary revenue includes income from baggage fees, seat selection and other add-ons.

Photo: Markus Mainka | Shutterstock

As with most of the world, airfares were on the rise in Asia, and the average AirAsia fare reached a new high of RM264 ($55) per passenger, a 26% increase year-on-year and a 6% increase from the previous quarter. Aviation group CEO Bo Lingam said the business had kicked off the year with a strong start and achieved its highest-ever quarterly performance and that fleet reactivation and acquisition plans are key components to fuel our ongoing growth trajectory.

“This year, we expect to add nine new aircraft to the fleet through new leases and new deliveries while continuing our aircraft reactivation program to bring the rest of the fleet online. Overall, we expect to progressively increase our total active fleet from 187 in 1Q to 221 by 4Q and to have 204 aircraft in operations by year-end, which we will use to extend our reach to new destinations.”

Lingam also made special mention of the latest airline to join the group, AirAsia Cambodia and said he is looking forward to it launching international routes in 3Q. The Aviation Group includes AirAsia, AirAsia Philippines, AirAsia Indonesia, AirAsia Thailand and AirAsia Cambodia.

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As the CEO of Capital A, Tony Fernandes also commented and presented a bullish and confident view of the group’s performance in the first quarter. He also talked up the strategy to divest the aviation group and restructure Capital A’s businesses, adding he was excited as the Aviation Group returns to full capacity and grows its fleet further “with the resulting ecosystem synergies for Capital A companies.”

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