Wednesday, March 07, 2007

AirAsia plans more new routes

SEPANG: AirAsia Bhd plans this year to introduce between four and six new routes, including to Ho Chi Minh City, Vientiane and Myanmar.

At the group level, this would mean a total nine new routes.

On the launch date for the new routes from Malaysia, chief executive officer Datuk Tony Fernandes said the company was currently working hard to secure the rights for those destinations.

“For our Indonesian unit, we plan to reintroduce the Jakarta-Johor Baru sector and launch a new route between Jakarta and Kuching. I see a lot of connectivity happening,” he said after AirAsia received its 17th Airbus A320 at the Low-Cost Carrier Terminal (LCCT) yesterday.

The latest aircraft depicts Malaysia's rich cultural tapestry against a backdrop of white and sky blue in line with the Visit Malaysia Year 2007 campaign.

Tourism Minister Datuk Seri Tengku Adnan Tengku Mansdor with Tony Fernandes at Airasia's 17th A320-Visit aircraft roll-out celebration on Tuesday
Fernandes said there had not been much progress on talks for AirAsia to operate the Kuala Lumpur-Singapore route but he “remained hopeful”.

“Competition is good and we are pushing hard to open the route. Ultimately, Malaysia will benefit and I welcome other low-cost carriers to operate here as well,” he said, adding that better connectivity meant an improved travel experience for tourists.

For the next five years, Fernandes would like to develop a positive image for AirAsia, now seen as unreliable due to frequent flight delays. He also aims to increase frequency and improve connectivity.

“I want to provide high quality services and give people many options,” he said.

Meanwhile, brokerages contacted by StarBiz said AirAsia's second quarter financial results were above expectation.

A research report by Merrill Lynch said AirAsia's results exceeded its forecasts with the key pre-tax profit 13% ahead of expectation and 73% higher than the previous corresponding period.

“The result was driven by revenue, with the airline posting both higher fares and a better load factor than we were expecting as domestic competition eased,” it said in the report.

TA Securities senior analyst Rosnani Rasul said AirAsia's cumulative pre-tax profit of RM105mil came within expectation but above consensus.

“First half pre-tax profit accounted for 57% of our full year forecast,” she said.

It revised the financial year 2007 (FY07) and FY08 earnings higher by 25% and 16% after lowering ancillary income as a percentage of revenue and factoring in a marginal tax rate of 5% beginning FY07 in line with the adoption of different accounting practices.

A local brokerage said first half results were above expectations due to better yields, lower-than-expected cost and recognition of investment allowance as deferred tax assets. It also revised upwards its net profit forecast by 102% for FY07 and 23% for FY08 to factor in improvement in yields, lower cost and the impact of deferred taxation in FY07.

Source : STAR
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