Southeast Asia's leading low-cost carrier AirAsia said today its net profit for the year to June slumped 30.2 percent to RM111.63 million from an earlier forecast.

AirAsia blamed higher fuel prices and a shortage of aircraft for the result, which was well below the RM159.9 million ringgit full-year profit it forecast in its initial public offering (IPO) prospectus of October 2004.

"Therefore, the results achieved by the group for the financial year ended June 2005 showed a deviation of RM48.3 million or 30.2 percent from the profit forecast stated in the IPO prospectus," it said in a statement.

AirAsia attributed its poor performance to higher fuel costs, a fewer than expected number of aircraft deployed, and its share in the losses of its joint venture offshoot Thai AirAsia Co Ltd.

AirAsia said that in October 2004 it was assumed that the average aircraft jet fuel cost of the Malaysian operations would be US$42 per barrel for the first half to December 2004 and US$43.96 per barrel for the second half to 30 June 2005.

"The actual average fuel cost US$43.95 per barrel and US$46.28 per barrel for the first half to 31 December 2004 and the second half to 30 June 2005 respectively," it said.

AirAsia was listed in November last year and this was its first full-year result.

No hike in fuel surcharges

Chief executive officer Tony Fernandes said the company would concentrate on expanding its operations in Malaysia, Thailand and Indonesia in the immediate future, and "will not hike fuel surcharges within the next six months".

AirAsia said the shortfall in the average number of aircraft deployed in both Malaysia and Thailand had affected other elements used in the preparation of the profit forecast, such as the number of passengers carried.

It said in the profit forecast that it would increase its fleet in Malaysia from 13 aircraft as at June 30, 2004, to 25 aircraft as at June 30, 2005, and that the Thai fleet would comprise 11 aircraft.

But the actual number of aircraft it had in Malaysia was 19 and the average number of aircraft deployed during the financial period was 16.3. In Thailand it has six planes and the average number deployed was 5.1, it said.

"The performance of the group has been affected by delays in aircraft deployment due to the tightening of the used B737-300 lease market which has led to higher lease rates as compared to the rates assumed in the profit forecast."

AirAsia said it was unwilling to make a commitment for higher lease rates because its success hinged on its ability to maintain a low-cost structure.

Also, it is waiting for the delivery of Airbus aircraft in the second quarter of financial year ending June 30, 2006.

Losses in Thailand

AirAsia said its Thai offshoot was unable to meet its profit forecast due to domestic competition and the dampening of the air travel due to unrest in the country's Muslim south.

Thai AirAsia was originally forecast to contribute an after-tax profit of about RM14 million to the parent company, but instead it had to absorb RM5.3 million of losses, it said.

However, the airline which retains its leading position in an extremely competitive environment was upbeat about the future.

"Barring unforeseen circumstances and the timely delivery of aircraft, the directors remain positive about the future prospects for the group," it said.