SINGAPORE (Feb 12): AirAsia X (AAX) is on track to post its second straight year of profit in the financial year just ended, but net profit is likely to come in lower than the previous year, owing to unfavourable exchange rates and a one-off provision for doubtful debts in connection with overdue legacy receivables.
CEO Benyamin Ismail, 40, expects the airline to be “slightly profitable” in FY2017 ended Dec 31, backed by two quarters of profits in 1QFY2017 and 2QFY2017 and lower unit costs. The airline will issue its fourth-quarter and full-year 2017 financial results on Feb 27. Net profit for the nine months ended Sept 30 fell 85% y-o-y to RM14.47 million ($4.9 million), as AAX swung to a net loss in 3QFY2017, dragged down by a provision for doubtful debts of RM50.2 million.
Benyamin, a former investment banker, tells The Edge Malaysia in an interview at AAX’s Sepang headquarters: “Stripping out the provision, we reported a profit [in 3QFY2017]. And we performed okay in 4QFY2017. Operationally, we have been doing very well, as our cost per available seat kilometre [CASK] has come down. Our fares have also been steadily moving upwards, considering that our seat capacity has increased by over 40% [since 2015], which is very tough.”