AirAsia profit falls 73% on higher operating costs

Malaysian budget airline AirAsia Bhd. (5099.KU) on Tuesday posted its weakest quarterly earnings in nearly two years, as second-quarter net profit was weighed down by higher operating expenses.

Net profit for the April-June period fell 73% to 92.5 million ringgit ($21.7 million) from MYR342.1 million a year ago, according to a local stock-exchange filing Tuesday.

Revenue for the quarter climbed 47% to MYR2.38 billion ($557.6 million) from MYR1.62 billion the previous year.

AirAsia, Asia’s largest low-cost airline by passenger numbers, said it was optimistic about stronger results this year, citing strong demand and stable fuel prices and foreign-exchange rates. It said it expects to achieve an average load factor of 88% in the third quarter.

The low-cost airline said it plans to add 22 more planes to its fleet through a combination of finance and operating leases in the second half of 2017.

Shares of AirAsia traded 0.6% higher at MYR3.30 ahead of the earnings release, outperforming the local benchmark stock index’s 0.5% drop.

The stock was suspended from trading Tuesday afternoon pending an announcement. In April, The Wall Street Journal reported that a sale of AirAsia’s leasing business, Asia Aviation, to Korea Transportation Asset Management was imminent.