South-East Asia's largest budget carrier AirAsia said its first-quarter net profit fell 23 percent mainly due to lower forex gains rather than high oil prices.

Net profit for the quarter ending March 31 was RM171.9 million (US$56.3 million), compared with RM224.1 million a year earlier, the airline said in a statement yesterday.

Revenue increased by 20 percent to RM1.05 billion from RM870.6 million.

Group chief executive officer Tony Fernandes said the airline's performance was "excellent despite high fuel prices."

"What is particularly significant for us is that our operating profit margins were also significantly higher year-on-year, demonstrating that we are maintaining tight control of costs even as we grow revenues," he said.

The airline recorded operating profit of RM241.72 million, up 46 percent year-on-year. The operating profit margin was 23 percent, up three percentage points.

"Yes, fuel prices shot up - but that is something beyond our control.

"Our response is not to wring our hands and moan, but to use our creativity to address the issue and find ways to overcome this challenge.

To increase the number of passengers

"And our Q1 results indicate that we are on the right path," Fernandes said.

The statement said the drop in profit was largely due to lower unrealised foreign exchange gains.

AirAsia started imposing fuel surcharges this month to offset escalating jet fuel prices. Global oil prices hit a record 32-month high of US$125 per barrel in April, before easing to below $100 last week.

Fernandes said for the rest of the year, the group would focus on keeping costs down to offer low fares and increase the number of passengers, especially in Southeast Asia.

Fernandes said AirAsia had hedged about 17 percent of its fuel requirements for the second half so far for this year.

AirAsia's fourth-quarter net profit rose more than nine-fold from a year earlier to RM316.6 million due to strong passenger demand and higher yields.

Net profit for the full year doubled to RM1.07 billion from RM506.3 million in 2009.

For the full year, the airline said it carried 16.0 million passengers, up 12 percent from 14.3 million the previous year.

- AFP