The long-haul associate of AirAsia Bhd also posted a 2.7 per cent dip in revenue to 653.03 million ringgit against 671.61 million ringgit in the same quarter last year.

In its filing with Bursa Malaysia, AAX said the decrease was mainly due to lower schedule flights including fuel surcharges as a result of lower passengers flown. However, despite load factor falling to 12 per cent, average passenger fare improved by 7.2 per cent to 415.91 ringgit during the quarter.

Charter revenue grew to 119.3 million ringgit from 85.7 million ringgit in the previous corresponding quarter on more charter contracts secured.

Ancillary revenue including AirAsia Insure fell 24.3 per cent to 106.6 million ringgit against 140.7 million ringgit last year due mainly to the lower number of passengers flown.

Meanwhile, aircraft operating lease income increased to 65.4 million ringgit from 17 million ringgit in the second quarter of 2014 due to additional aircraft sub-leased to Thai AirAsia X Co Ltd (TAAX) and PT Indonesia AirAsia Extra (IAAX).

Revenue per available seat kilometre (RASK) during the quarter increased 6.7 per cent to 11.51 sen, compared with 10.79 sen previously.

AAX'€™s other operating expenses fell 56 per cent to 30.4 million ringgit due to the recognition of unrealised foreign exchange gain in operations from the weaker ringgit.

For the first half, AAX almost doubled its net loss to 258.86 million ringgit from 140.1 million ringgit previously. Revenue was slightly higher at 1.428 billion ringgit against 1.421 billion ringgit in the year before.

RASK increased by 7 per cent to 12.24 sen during the first half.

For the first half, scheduled flights including fuel surcharges, fell 11.6 per cent to 794 million ringgit due mainly to lower passengers flown. However, average passenger fare increased by 7.8 per cent to 462.29 ringgit for the six months.

Charter revenue increased to 232.7 million ringgit on more charter contracts secured. Meanwhile, ancillary revenue including AirAsia Insure, decreased 19.3 per cent to 234.6 million ringgit due to the lower number of passengers flown.

Aircraft operating lease income was higher at 112.5 million ringgit due to additional aircraft being sub-leased to TAAX and IAAX.

The group'€™s operating expenses decreased 3.7 per cent to 1.534 billion ringgit on lower aircraft fuel expenses, and other operating expenses. However, maintenance, overhaul, user charges and other related expenses; and aircraft operating lease expenses increased during the six-month period.

Moving forward, AAX said advance bookings indicated that recovery in passenger and yields evident in the second quarter quarter would hold up for the rest of 2015. It expects average fares to be higher on resumption of marketing activities and better price discipline.

'€œThe company remains on track with its turnaround plan with a focus on optimising fleet size and improve yields and loads,'€ it said. AAX added that the severe weakening of ringgit would adversely impact its financial performance.

It believes it has taken the necessary steps to rationalise its operations and improve financial performance, taking into account its recently completed rights issue with warrants exercise.

Meanwhile, India'€™s Tata Group has increased its stake in AirAsia India to 41 per cent from 30 per cent previously. AirAsia also announced $160 milion in cost savings from weakening crude oil prices, was expected next year.

Following this, shares in AirAsia hit a high of 1.13 ringgit and was one of the top 10 most active stocks traded on Bursa yesterday. It closed the day 2 sen lower to 1.07 with 35.5 million shares done.(++++)

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