Surge in Q2 profit masks underlying challenges for AirAsia

AirAsia Group reported a surge in Q2 net profit on the back of a tax benefit, but operating profit fell sharply as fuel and maintenance costs increased. The Malaysian budget carrier said on Thursday that net profit for April-June rose by 147% to 361.8m ringgit. However, that was mainly thanks to a one-off tax benefit from the sale of aircraft last year and masked underlying challenges, particularly for long-haul arm AirAsia X, which swung into the red. While group revenue rose 10.3% in Q2 from a year earlier to 2.62b ringgit, net operating profit fell nearly 18% to 324.8m ringgit. AirAsia's load factor fell by 3 percentage points to 86 percent on average at its operations in Malaysia, Indonesia and the Philippines that are consolidated for accounting purposes. Capacity at those airlines expanded by 12%, outpacing growth in passenger volumes.<br/>