Air Asia shows lower net profits but higher revenue

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Despite rising fuel costs which led to a decrease in overall profits in the first quarter of 2011, revenue is up for Air Asia.  The budget airline’s operating profit was up 46% over last year, but net profit decreased by about 23% due to foreign exchange gains.  CEO Tony Fernandes says that while fuel prices are out of their control, “we are maintaining tight control of costs even as we grow revenues.”  Reducing overall costs has allowed them to continue expanding, evidenced by their increase in passengers over 2010. 16 million people flew Air Asia in 2011 as opposed to 14.3 million in 2010.

Air Asia recently added a fuel surcharge to many flights to combat rising international gas prices.  The price of a barrel of oil is at an all-time high, sending repercussions throughout many industries.  Revenue was up 20% in Q1, so the decrease in net profit has more to due with the forex gains than with lower production/service.  Air Asia continues to cut costs in an effort to combat the forex and fuel issues.

 

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Reading Time: 1 minute

Despite rising fuel costs which led to a decrease in overall profits in the first quarter of 2011, revenue is up for Air Asia.  The budget airline’s operating profit was up 46% over last year, but net profit decreased by about 23% due to foreign exchange gains.  CEO Tony Fernandes says that while fuel prices are out of their control, “we are maintaining tight control of costs even as we grow revenues.”  Reducing overall costs has allowed them to continue expanding, evidenced by their increase in passengers over 2010. 16 million people flew Air Asia in 2011 as opposed to 14.3 million in 2010.

Reading Time: 1 minute

Despite rising fuel costs which led to a decrease in overall profits in the first quarter of 2011, revenue is up for Air Asia.  The budget airline’s operating profit was up 46% over last year, but net profit decreased by about 23% due to foreign exchange gains.  CEO Tony Fernandes says that while fuel prices are out of their control, “we are maintaining tight control of costs even as we grow revenues.”  Reducing overall costs has allowed them to continue expanding, evidenced by their increase in passengers over 2010. 16 million people flew Air Asia in 2011 as opposed to 14.3 million in 2010.

Air Asia recently added a fuel surcharge to many flights to combat rising international gas prices.  The price of a barrel of oil is at an all-time high, sending repercussions throughout many industries.  Revenue was up 20% in Q1, so the decrease in net profit has more to due with the forex gains than with lower production/service.  Air Asia continues to cut costs in an effort to combat the forex and fuel issues.

 

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