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AirAsia Group's profits slashed, but “untold fortunes await” with contrarian strategy


AirAsia’s second quarter profit result contained few surprises. Net profit fell 95% and operating margins slipped below 5%. CEO, Tony Fernandes, stated it was nonetheless a “commendable performance” given that unit fuel price increased by 65% to USD142.5 per barrel. AirAsia is maintaining its contrarian approach of continuing to grow strongly as its competitors cut back. [1363 words]

Unlock the following content in this report:


  • Rapid expansion taking toll on short term performance
  • Keeping a handle on costs: still has the lowest costs in the world
  • Cross border JVs on path to profitability, but still in the red
  • AirAsia X: "Dark horse that adds value"
  • Outlook: Remains confident in outlook in the face of widespread economic slowdown

Graphs and data:

  • AirAsia financial highlights for three months ended 30-Jun-08
  • AirAsia passenger numbers (mill) and passenger load factor (%): 1Q07 to 2Q08
  • AirAsia sectors flown vs Average fares (MYR): 1Q07 to 2Q08
  • AirAsia: Unit cost per ASK (USD cents): 2Q07 vs 2Q08
  • Sample LCC unit cost (per ASK; USD cents)
  • AirAsia cost per ASK (sen): Non-fuel vs including fuel: 1Q07 to 2Q08
  • AirAsia fleet composition: Aug-08
  • Thai AirAsia financial highlights for three months ended 30-Jun-08
  • Indonesia AirAsia financial highlights for three months ended 30-Jun-08
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