Vietnam business and finance news - Intellasia News Services

This undated picture received on July 27, 2008 shows budget air carrier AirAsia X's first leased Airbus A330 long-haul aircraft at Kuala Lumpur International Airport's low-cost carrier terminal in Sepang. (AFP/Getty Images)

AirAsia made its first net loss of RM465.5 million since it was listed in 2004 while MAS' third quarter net profit plunged 90% to RM38.1 million

Malaysia'S two listed airlines yesterday reported third quarter results that highlighted a difficult business environment but both were optimistic of doing well in 2009.

AirAsia Bhd (5099) and Malaysia Airlines had to contend with high fuel prices and slower demand for travel in the July to September 30 period.

Budget carrier AirAsia made its first net loss since it was listed in 2004, mainly due to one-off provisions for contracts tied to fuel hedging and trades held by now-bankrupt investment bank Lehman Brothers.

Net loss was RM465.5 million in the third quarter. Third quarter revenue jumped 43% to RM658.5 million.

It was hit by a RM215 million charge to unwind contracts made to lock-in the price of fuel. The price has dropped sharply, in tandem with the oil price, and this has forced many airlines to report hedging losses.

"We have to deal with short-term pain for long-term gains," said chief executive officer Datuk Seri Tony Fernandes, who expects to recover its hedging losses as early as January next year.

Without these provisions, the company would still have made an operating loss of RM76 million, as it did not raise fares quick enough when fuel prices surged.

Its load factor also fell from 76% in the second quarter this year to 75%, while average fares eased to RM195 from RM198. It carried 3.02 million passengers during the quarter, about 7% more than the 2.82 million passengers it carried in second quarter.

As for MAS, third quarter net profit plunged 90% to RM38.1 million as its fuel bill rose 56% to RM1.9 billion.

"The world economy is going through a downward spiral so next year will be tough," managing director and chief executive officer Datuk Seri Idris Jala said at a media briefing on its third quarter results at Kuala Lumpur yesterday.

He expects MAS to remain profitable next year.

Revenue was maintained at RM4.11 billion for the three-month period ended September 30 2008, attributed to its operating performance and non-fuel expenses which fell by 14% to RM2.2 billion.

While Idris said that MAS will not change is profit target, the airline has its work cut out to achieve the RM400 million-RM500 million initial target by end of the year.

For the nine-month period, MAS has achieved cost efficiencies of RM900 million, on track to its RM1 billion target for 2008.

Idris said it did not have individual plans to cut capacity as it had done so progressively in the last two-years.

"We will take delivery of three leased 737-800 planes next year which we will use to add frequencies for key regional routes such as Bangkok and Jakarta where there is high demand from business passengers," he added.

MAS would not expand its manpower except to cater for its new fleet expansion under Firefly and also for its maintenance, repair and overhaul division, said Idris.