AirAsia X reported a record profit in 2016 as more people took to the skies, but results fell short of analysts’ estimates as volatile foreign exchange markets dragged earnings down by 80 per cent in the fourth quarter.
The airline expects its prospects to remain positive based on current booking trends, but said the depreciation of the Malaysian ringgit remains a key concern as a large portion of the company’s borrowings and operating costs are denominated in US dollars.
Previously, the airline saw the weaker ringgit, which has taken a beating over the past two years, as a boon because it made Malaysia a value-for-money destination among travellers, increasing passenger traffic.
The AirAsia X chief executive Benyamin Ismail said on Wednesday the company will look to reduce the impact of foreign exchange rates by intensifying sales from stronger currency markets such as the Australian dollar to offset US dollar bills.
“As we foresee the industry’s challenging environment persisting owing to currency volatility, the management will continue to look for avenues to mitigate forex risk via hedging,” he said.
The airline has already added capacity in Australia and is increasing frequency on other routes where demand is high to shore up its results, having been in the red for the past two years.
Last month, the airline said it had become Asia’s first low-cost carrier to receive approval to operate scheduled passenger flights to any US destination. It is considering flights to several US states, including Hawaii.
Mr Benyamin said the airline was also looking to cut costs.
AirAsia X posted a net profit of 39 million ringgit (Dh32.3m) for the October-December quarter, lower than the 197.4m ringgit recorded a year ago. For the full year, profits came in at 230.5m ringgit, versus an average estimate of 236m ringgit in a Reuters poll.
Revenue rose 39 per cent to 1.17 billion ringgit for the quarter, versus 841m ringgit in the same period last year.
In its operating statistics, the airline said its passenger load factor for the final quarter fell 2 percentage points to 81 per cent from a year ago, but passenger traffic jumped 40 per cent to 1.38 million.
AirAsia X shares closed unchanged at 41.5 sen having risen 15.3 per cent in the year-to-date.
* Reuters
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'Worse than a prison sentence'
Marie Byrne, a counsellor who volunteers at the UAE government's mental health crisis helpline, said the ordeal the crew had been through would take time to overcome.
“It was worse than a prison sentence, where at least someone can deal with a set amount of time incarcerated," she said.
“They were living in perpetual mystery as to how their futures would pan out, and what that would be.
“Because of coronavirus, the world is very different now to the one they left, that will also have an impact.
“It will not fully register until they are on dry land. Some have not seen their young children grow up while others will have to rebuild relationships.
“It will be a challenge mentally, and to find other work to support their families as they have been out of circulation for so long. Hopefully they will get the care they need when they get home.”
Volvo ES90 Specs
Engine: Electric single motor (96kW), twin motor (106kW) and twin motor performance (106kW)
Power: 333hp, 449hp, 680hp
Torque: 480Nm, 670Nm, 870Nm
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Price: Exact regional pricing TBA
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More coverage from the Future Forum
Specs
Engine: Duel electric motors
Power: 659hp
Torque: 1075Nm
On sale: Available for pre-order now
Price: On request
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
Essentials
The flights
Etihad and Emirates fly direct from the UAE to Delhi from about Dh950 return including taxes.
The hotels
Double rooms at Tijara Fort-Palace cost from 6,670 rupees (Dh377), including breakfast.
Doubles at Fort Bishangarh cost from 29,030 rupees (Dh1,641), including breakfast. Doubles at Narendra Bhawan cost from 15,360 rupees (Dh869). Doubles at Chanoud Garh cost from 19,840 rupees (Dh1,122), full board. Doubles at Fort Begu cost from 10,000 rupees (Dh565), including breakfast.
The tours
Amar Grover travelled with Wild Frontiers. A tailor-made, nine-day itinerary via New Delhi, with one night in Tijara and two nights in each of the remaining properties, including car/driver, costs from £1,445 (Dh6,968) per person.
Company profile
Date started: 2015
Founder: John Tsioris and Ioanna Angelidaki
Based: Dubai
Sector: Online grocery delivery
Staff: 200
Funding: Undisclosed, but investors include the Jabbar Internet Group and Venture Friends
Specs
Engine: 51.5kW electric motor
Range: 400km
Power: 134bhp
Torque: 175Nm
Price: From Dh98,800
Available: Now
The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
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