AirAsia SWOT Analysis: Tough second quarter ahead, but fundamentals solid

AirAsia Bhd reported a bumper 26% increase in net profit to USD58 million in the typically slow first quarter ended 31-Mar-09 - the carrier's best quarterly result since the final three months of 2007. The result was achieved on the back of solid increases in revenues, driven by rising passenger numbers, yields and ancillary revenues. Operating margins above 20% in the past two quarters are an outstanding achievement. But, the virtuous cycle could be broken in the second quarter as oil prices surge. In this report, we consider AirAsia's internal strengths and weaknesses, as well as the external opportunities and threats on the business.