AirAsia's Profit Surges on Share Sale of Thai Business

Air Asia
Source: Jyi1693 | Wikipedia
Air Asia

AirAsia, Asia's largest budget airline by passengers, reported full year profit more than tripled, beating expectations, thanks to the share sale of its Thai business.

AirAsia reported full-year profit of 1.88 billion ringgit ($606.65 million), higher than the average forecast of full-year profit of 775.7 million ringgit in a Thomson Reuters poll of 20 analysts.

Core net income was slightly higher at 858.23 million ringgit in 2012 from 850.70 million a year earlier mainly on higher passenger volume and average fare.

(Read More: AirAsia Ready to Take on India Challenge: CEO)

AirAsia said in its accounts it booked a gain of 1.16 billion ringgit for the Thai AirAsia share sale last year.

AirAsia is shifting from a period of rapid expansion into new markets and placing jet orders to build a modern fleet, to taking delivery of those planes and focusing on making its routes profitable.

(Read More: Asia's Airline Boom Comes With Rising Competition)

The Malaysian company competes against Indonesia's Lion Air to dominate cheap air travel across the continent, and multi-billion-dollar orders from both have boosted aircraft sales at Airbus and Boeing.

AirAsia's next move is a planned joint venture with Tata Sons to start flying in India later this year, a market the airline has described as the "final piece of the puzzle".

"The main focus for the next few years will still be the three core markets - Malaysia, Thailand and Indonesia," Group Chief Executive Tony Fernandes said in a statement on Tuesday. "Then grow Japan and Philippines in a way it will be profitable."

(Read More: Thailand Posts Strong Growth on Consumption)

The stock was down 1.1 percent at the close of trade on Tuesday, before results were announced, compared with a 0.2 percent fall in the index.