All 7 AirAsia affiliates improve in 1Q2016: Southeast Asian airlines' profits increase 50%

Southeast Asia's airline sector experienced a further improvement in profitability in 1Q2016, boosted by lower fuel prices and more favourable conditions in most of the region's main markets. However, profitability in Southeast Asia remains at a much lower level than in most other regions due to intense competition and overcapacity in some markets.

A sampling of 20 Southeast Asian airlines recorded approximately a 50% increase in operating profits in 1Q2016. Among the 20 airlines, 14 reported year-over-year improvements, including all seven of the AirAsia-branded airlines.

The increase in profits to nearly USD700 million in 1Q2016 follows a significant improvement in profitability in 2015. The same group of 20 Southeast Asian airlines swung from a collective operating loss of over USD800 million in 2014 - when market conditions were extremely challenging - to a profit of more than USD1.2 billion in 2015. With 1Q2016 profits at a level of more than half the 2015 full year profits, the outlook for 2016 is now relatively bright.