AirAsia reports strong Q2 earnings- positive projection for rest of the year

Malaysian airline, AirAsia, which pioneered low cost travel in Asia, has reported a near fifteen-fold increase in Q2 net income – to MYR139.2 million ($39.6 million) from MYR9.4 million in the year-ago quarter.

Crediting low fares for the robust growth in traffic, growing ancillary revenue and "substantially lower" fuel prices for the strong performance, CEO Tony Fernandes noted that the LCC's results "stand in stark contrast to those of most legacy carriers."

He also pointed to the carrier's "three-pronged strategy of lowering fares, stimulating travel... and capturing market share."

He added, "Despite lowering fares by an average of 19%, we still managed to produce strong profit growth...With our low unit cost base, we have the flexibility to reduce our already low fares without hurting our bottom line."

Second-quarter revenue was up 8% to MYR657.4 million on the back of a 23% jump in traffic.

Fernandes was upbeat about H2, projecting similar passenger growth rate for the second half, saying the company's positive "momentum" would carry through the remainder of the year despite the weak economy.