AirAsia X flies back into profit as China provides lift

Malaysia's long-haul no-frills airline boosted by travellers from world's second-biggest economy.

Malaysia's long-haul budget airline AirAsia X swung to quarterly profit boosted by strong traffic from China, and said it would re-evaluate its operations in Indonesia due to regulatory issues.

First-quarter profit totalled 179.5 million ringgit (Dh160m), compared with a loss of 125.9m ringgit in the year-ago quarter. Revenue rose 25 per cent to 970.7m ringgit, with revenue from China alone surging 49 per cent.

“In the first quarter, the China market contributed the highest growth,” the AirAsia X Group chief executive Kamarudin Meranun said on Tuesday.

We see this growth trend continuing through 2016 with the introduction of visa-free travel for Chinese visitors to Malaysia, and we expect the strong inbound traffic from China to feed into other core markets, he added.

AirAsia X also said that based on current forward bookings, second quarter passenger numbers looked encouraging. It would focus on strategic growth initiatives in Malaysia and Thailand while re-evaluating its operation in Indonesia.

Net loss at the company’s Indonesia operations halved to 4.6m ringgit in the first quarter, but the company said the operational environment remained challenging due to restrictions imposed by regulators.

This month, Indonesia said it plans to suspend the in-house ground handling operations of two budget carriers at two of the country’s biggest airports while it investigates possible handling errors.

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