PHILIPPINES Air Asia is bullish on its prospects of breaking even or posting a profit in 2016 after significantly narrowing losses in the fourth quarter of 2015.
The carrier, based on a regulatory filing by Malaysian budget carrier Air Asia Berhad, posted a 51-percent increase in revenue to P2.3 billion in the fourth quarter last year.
Capacity during this period grew 30 percent while it cited a 47-percent increase in ticket revenue.
“The cost reduction and re-fleeting exercise has enabled us to successfully almost break even [last] quarter,” Air Asia founder and Group CEO Tony Fernandes said in the filing. He said operating losses were reduced to P110.6 million.
Fernandes said the company eyed a 25 percent to 30 percent gain in revenue for the first quarter of 2016 compared to the same period in 2015.
“In addition, our forecast shows high load factor in the current quarter, which coupled with low oil prices, is expected to allow us to continue achieving breakeven or even profitability in our Philippines’ operations in the coming months,” Fernandes said.
Earlier, aviation consultancy CAPA-Center for Aviation said 2016 was a “critical year” for the Air Asia Group to prove that it can be a viable carrier in the Philippine market.
Philippines Air Asia operates a dozen Airbus A320s, and has a domestic market share of about 10 percent, its CEO Joy Cañeba said in a previous interview.
The carrier is retiring two of its remaining “inefficient planes” this quarter, Fernandes said in the carrier’s filing. Philippines Air Asia’s local partners include businessmen Alfredo Yao, Marianne Hontiveros, Antonio Cojuangco Jr. and Michael Romero.