Kuala Lumpur (XFNews-ASIA) - Budget carrier AirAsia said its net profit for the year to June 2006 rose by 14 pct due to increases in fares and passenger loads.
The low-cost carrier reported a net profit of 126.94 mln rgt for the fiscal year, compared to 111.1 mln rgt a year earlier.
"AirAsia has again delivered record traffic growth and profits in the face of significantly higher fuel prices, intense competition and volatile currency movements," chief executive officer Tony Fernandes said in a statement.
"This strong performance validates our belief that the low fare, low cost model will continue to grow profitably in both good and bad times."
Revenues were higher at 855.6 mln rgt, compared to 666.1 mln rgt a year earlier, driven by a 5.7 pct increase in average fares to 130 rgt in the current quarter.
Passenger load factors rose to 83 pct in the fourth quarter from 80 pct in the previous quarter.
"The group is facing a number of challenges including increased competitive pressures, lower yields due to our aggressive promotional fares and the unpredictability of fuel prices," the airline said.
AirAsia said the high cost of jet fuel remains a concern.
"The board does not anticipate fuel prices falling significantly and is of the view that they will remain at high levels in the short term," it said.
But despite the challenges, AirAsia remains positive that its long-term business outlook is geared for growth, the statement said.
Air Asia's joint venture operations in Thailand and Indonesia both posted losses.
Fernandes said the Thai operations saw the load factor rise to 76 pct in the fourth quarter compared to 68 pct for the same period last year.
However, currency translation losses canceled out 30 mln baht of operating profits and Thailand posted a net loss of 36 mln baht, he said.
"We are looking at structures and resources to better manage our currency exposure and have hired additional qualified personnel in this area to oversee this portfolio," he said.
In Indonesia, losses have been stabilized and the operation is on track to break even in the 2007 financial year, Fernandes said.
"The government's decision to allow us to advertise fares and levy fuel surcharge has significantly improved the Indonesian operations. We have seen load factors and average fares improving significantly," he said.
During the year, AirAsia added 15 aircraft to its fleet, 13 new routes were introduced and the airline carried its 20 millionth guest, Fernandes said.
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