AirAsia, Asia's largest low-cost carrier by fleet size, said on November 20 its third-quarter net profit fell 77.5 percent year-on-year due to foreign exchange losses despite an increase in passengers. Net profit for the quarter ending September 30 stood at 35.48 million ringgit ($11.14 million) compared to 157.81 million in the same quarter last year.
Revenue increased 3.5 percent to 1.28 billion ringgit from 1.24 billion ringgit the previous year, supported by a 11 percent growth in passengers, it said.
Operating profit rose by 5.0 percent to 291.06 million ringgit for the quarter. But the bottom line was hit by foreign exchange losses on borrowings.
Average fares also fell 12 percent from the same quarter last year as AirAsia cuts prices to stay ahead of competitors, including struggling national flag carrier Malaysia Airlines and the recently set-up Malindo Airways, an affiliate of Indonesia's budget carrier Lion Air. "The main thing to highlight is that despite irrational competition by competitors, AirAsia is able to post higher operating profit and margins," the company said in a statement.
AirAsia said the outlook was "strong" for the rest of the year.
"Passenger numbers are expected to be particularly strong in November and December during the year-end holiday period and remain strong for the rest of the quarter in line with the seasonal patterns," it said in the stock market filing.
The airline's profits slumped 62 percent in the second quarter and 39 percent in the first quarter year-on-year.
This follows a highly profitable 2012, when AirAsia recorded a 238 percent jump in net profit for the full financial year despite a 1.0 percent rise in the average fuel price.
AirAsia, run by flamboyant boss Tony Fernandes, has grown from a struggling two-plane operation in 2001 to a total fleet of more than 120 A320s.
The airline, one of the biggest customers for European aircraft maker Airbus, is expecting nearly 360 more aircraft to be delivered up to 2026.
It has also set up subsidiary budget carriers in Indonesia, the Philippines and Thailand and plans to launch a no-frills joint venture in India later this year.