Malaysian low-cost airline company, AirAsia Berhad, confirmed to TRBusiness that its total ancillary revenue – including duty free and inflight meals – reached RM471m (US$110m) up 15% yoy in the second quarter of this year (ending 30 June) and now represents 20% of the group’s total revenue.

 

Ancillary spend per passenger grew by RM2 ($0.47) yoy to reach RM49 ($11.48) with the company voicing that its ‘Big Duty Free’ programme certainly has ‘room for growth’ especially as it learns to make effective use of its data to increase uptake of seat delivery and airport pick-up options.

 

The group posted total Q2 2017 revenue of RM2.38bn, up 19% on a like-for-like basis from RM1.99bn in the same quarter last year. Revenue growth was supported by a 10% increase in passengers carried alongside a two percentage point increase in load factor.

 

However, during the period, Thai AirAsia posted a decline in operating profit of 48% year-on-year to THB397m.

 

LOW COST CARRIERS CAN WEATHER TOUGH CLIMATES

“Despite the tougher operating environment in the seasonally weaker second quarter of the year, we managed to serve more passengers and increase our load factor in almost all the markets we operate in,” said AirAsia Group CEO Tony Fernandes.

 

 

“What this proves, is that AirAsia and the low-cost carrier model stimulates new traffic in both existing and new markets and generates growth even when operating conditions are less than ideal for other airlines, especially full-service carriers.

 

“The financial performance of our Thai associate weakened in the second quarter, but we believe this to be temporary. Operating conditions in Thailand were less than favourable during the quarter, but Thai AirAsia emerged the only profitable airline.

 

“Our strategy for long-term growth in Thailand is to continue to maintain our leading share in the domestic market while growing our international network. We hope to include Thai AirAsia in our consolidated accounts before the end of the year.”