Malaysia's AirAsia posts lower Q3 operating profit on higher costs

AirAsia, Malaysia’s flagship budget airline, Wednesday reported lower operating profit for Q3, as an increase in expenses offset a growth in capacity. The carrier’s net operating profit for the three months ended September came in at 374.2m ringgit (US$91.72m), down 7.7% from a year ago. Average fuel price over the quarter rose 7% to $63 per barrel, AirAsia said. Its net profit, however, jumped almost 43% to 505.3m ringgit, helped by lower deferred tax expenses. This beat a forecast for 294.9m ringgit from one analyst, Thomson Reuters data shows. The airline’s capacity over the period rose 14%, while its average fare dropped 2%. AirAsia has been rapidly expanding capacity across Asia to take advantage of robust demand in emerging markets like Malaysia, Indonesia, Thailand and the Philippines, where cheap tickets help stimulate travel. The group is planning to add 12 aircraft to its fleet through operating leases in the fourth quarter, in one of its fastest pace of expansions in the last few years.<br/>