Malaysia's AirAsia X feels impact of weak ringgit, higher fuel cost

Profit at Malaysia's AirAsia X fell sharply in Q1, with a weak ringgit and higher fuel costs overshadowing higher revenue at the long-haul budget airline. AirAsia X's fuel and aircraft operating lease expenses are denominated in US dollars, as is much of its debt. Some analysts had forecast that AirAsia X's headline earnings for the quarter could underperform largely due to a 122m ringgit foreign exchange gain a year ago. But the airline's chief executive Kamarudin Meranun said in a statement that it was worth taking the short-term pain. "We believe the short-term earnings pressure arising from weakening ringgit against the US dollar as well as newly introduced capacity will be well worth the long-term strategic value as yields will rise as this new capacity matures." The budget long haul airline said on Tuesday that for the quarter ending in March, net profit was 10.3m ringgit ($2.4m), down 94.2% from 179.5m ringgit a year ago. However, AirAsia X said revenue rose 22% to 1.2b ringgit. "The relative weakness 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," AirAsia X said late Tuesday.<br/>