Everyone, good evening. Thank you for joining us on a Friday evening. Online currently we have Ben, CEO, and Lavinia, CFO, with us. As usual, Ben will do the presentation, and then we can do the question and answer session right after. Over to you, Ben.
Hey, everybody. Good evening. Welcome to the 3Q 2025 results. Let's get into it. Revenue increased 1% year-on-year to MYR 803.5 million on the back of a very good, healthy fare environment and high ancillary revenue. Net operating profit up four times to MYR 12 million versus MYR 3 million in 3Q 2024, driven a little bit by fuel costs and also stronger local currency, while net profit stood at MYR 27.8. CASK and CASK ex-fuel among the peers, still standing fairly strong at MYR 0.1268, down MYR 0.09 year-on-year and MYR 0.0672 year-on-year respectively, with better fuel prices and firmer ringgit boosted by 9% hike in ASK capacity.
Average base fare, which a lot of you were a bit worried throughout the last few quarters, have grown by 5% year-on-year to MYR 466, while ancillary revenue per pax high 11% to MYR 273, steered by significant improvement in duty-free performance. ASK capacity grew 9% year-on-year to 5,612 million as aircraft utilization scaled up 16 hours, driven by network optimization and longer haul operations. Passenger load factor held steady at 82%. Passenger traffic declined 5% to 1.03 million passengers as the company cut a bit of the shorter capacity, especially like Bangkok, Hong Kong, Amritsar, and Perth, and moved that towards longer flights, which we operated last quarter. One remaining aircraft is to be reactivated hopefully next year due to MRO backlogs and also the engine delays with Rolls-Royce. The company is expecting the inductions of also four A321LRs in 2026.
TAAX posted a revenue of MYR 235.4 million, unfortunately, a net loss of MYR 128.4 million . Unfortunately, in Thailand, as you know, they're suffering a slower market demand due to weaker tourism sentiment due to, I guess, the earthquake concerns, the border crisis, and everything else which has impacted the biggest chunk of tourist arrivals from China and North Asia. Back to the 3Q 2025 financial highlights. Revenue MYR 803.5 in 3Q 2025, marginally at 1% from MYR 795. Scheduled flight revenue marginally down MYR 479. As I mentioned earlier, basically based on few rearrangement of the redeploying of traffic and also a 6% decline in freight revenue, bolstered by a 5% growth in ancillary revenue. Ancillary revenue has outperformed. Net operating profit grew four times year-on-year to MYR 12 million on the back of improved fuel environment and also stronger currency.
In 3Q 2025, net profit trended MYR 27.8 million compared to MYR 121.6 million, which saw substantial gain in the preceding year. Operational highlights. ASK capacity increased 9% year-on-year to 5,612, with aircraft utilization trending close to 16 hours per day. Passenger load factor remained at 82%, and seat capacity reduced by 3%, tracking lower numbers of flights. In the last 12-month period, the company cut Bangkok, Hong Kong, Amritsar, and Perth, but not to say cut, as you look in a group whole scheme of things, it has actually been moved to AirAsia to garner more revenue and more frequency on those flights on the shorter aircraft. That really on the group is why it is actually a revenue upside. Review operating expense. Total operating expense improved 1% year-on-year. Lower aircraft fuel expenses despite higher consumption due to lower fuel prices.
Lower aircraft mix expenses due to optimized PBH aircraft utilization from quarter compared to the same period 2024. Higher operating expenses increased to MYR 57.9 million, primarily due to additional marketing spend on new routes in new markets, strengthening presence across the network. Again, we keep putting this slide in. We just want to keep reminding people the fact that we still remain one of the lowest cost structures in terms of airline, in terms of CASK and CASK ex-fuel. It is really driven by high utilization of active fleet, prudent management of rotary expenses, and niche ramp operation bolstered by jet fuel and also the appreciation of the ringgit. Ancillary performance recorded MYR 280.6 million, contributing to 35% of total revenue. This is quite an impressive growth, showing a 5% increase to the same period in 2024. Ancillary per pax remains strong at MYR 273, driven by better duty-free products.
This is just really showing that how much a pax is spending on a flight on top of the average fare that they are paying. Obviously, this is really hard work pay at the back of higher revenue or travel flexibility options. People are opting for travel flexibility options on their flights and in-flight service offerings enhancing value and passenger transaction. Also, we have also done quite a bit of work on in-house marketing initiatives and refined onboard offerings, resulting in a steady uplift in ancillary sales. Quickly, just to talk about TAAX. Revenue stood at about MYR 235.4 million in 3Q 2025, down 22% year-on-year.
Net operating loss stood at MYR 138 million, a 13% year-on-year decline on the back of higher staff costs and user charges, especially when we went into new markets, and higher charter flights driving up commission fees, which throughout the middle of the year, they wet leased out three aircraft to another airline to do Hajj flights and also mitigated by lower fuel expenses due to lower jet fuel. Loss before tax hovered around MYR 128 million due to ease up in international tourism in Thailand and also higher Forex. ASK capacity is up 1,789 in 3Q 2025, supported by higher number of operational aircraft following additional induction into the fleet during the quarter. Higher fleet frequencies also resulting in a 5-year increase in sectors flown, and also unfortunately, passenger carry reduced from 23.19 million,12.93million to 25 million in 3Q 2025 due to weaker tourism in the country.
Just to talk about business outlook. As we move into the strongest quarter for us, 4Q is looking good and is set to be a very strong quarter to conclude. We observed that forward bookings in our core markets are looking very strong. Focusing on capitalizing on the peak winter, especially holiday season. Markets like Japan, Korea, Central Asia is probably up for grabs. Usually the loads for this are usually seasonal, is very strong. China as well, we will be going into more of the lean season. I think that this is something that we are not too worried, as the forward bookings still look strong as China demand is slowly bouncing back very strong. Japan, Australia, South Korea, everything steady. We are focusing efforts to these markets in the coming months.
Also charging up companies' market presence and roots in their infancy, especially Tashkent and Istanbul, to maintain visibility in the market as the markets mature. Again, fuel and foreign exchange are expected to be favorable in the next few months, with Brent expected to hover around $62 per barrel, in 4Q 2025. Again, just to give you a bit of color on what the market and the macro side of things we are looking at. China advisory to avoid travels to Japan may have caught us napping handle of our operations as Chinese tourists pivot to our home region in ASEAN, and lower tourist arrivals in Japan were severe. May sell through lower costs of travel to Japan, consequently driving up demand to ASEAN instead of Japan. Our priorities, today and 2026. Network strategy as we try and complete our 2026 project.
Increasing frequencies to enhance connectivity and market share, looking into new markets. Improving overall OTP and building on our newly established markets, Central Asia and West Asia. As you know, we started Istanbul and there are more to come next year. Last, in terms of fleet growth plans, last aircraft to be reactivated early next year to meet network requirements, as we still try our best to try and look for more A330s out in the market. We are also reconfiguring some of our two aircraft that we took during COVID, and that was supposed to be this year, but due to MRO constraints, we have pushed that towards next year. Also exploring the four A321LRs to be inducted in 2026 to support network plans and also requirements, kickstarting the new era for us.
Commercial initiatives, maintaining ancillary spend-up performance with the continuous fine-tuning of pricing and personalization, also sustaining the targeted marketing plans which focuses on boosting Fly-Thru traffic with spend-up at 20%. Of course, working hard with Teleport to ensure that they drive as much of their cargo revenue to increase on a year-to-year basis, and also a quarter-to-quarter increase. Corporate focuses, again, you guys know this pretty well. Expectations to the completion of the aviation business acquisition by end December 2025, and continuous cost optimization across the organization ensuring lean structure throughout. As we move towards the network, we are looking into a whole scheme of things as a group. Short-haul, we will focus on usually high frequency point-to-point and trunk and branch across ASEAN and domestic markets, utilizing the A320 and A321neos to optimize fast turnarounds and agile operations. Anchors, network density, scale, brand visibility, steady and cash generation.
Medium-haul, which is us. We will be a network expander to connect from the short-hauls to the long hauls and medium, bringing the short-haul markets to North and Central Asia, Australia, and Middle East. Also to bring the A321LRs and XLRs to complement the A330, which really just to go and focus on build some of the markets that the A330s are too big and also increase frequency, and hopefully give opportunity to fly twice a day or also to now give the opportunity for us to enter the entry into markets where the secondary markets like China, where the population is fairly high and also the runways might be a bit shorter. Obviously this unlocks yield diversity, connecting traffic and network there. Additional information in terms of our global destinations. You know this well. This is just growing and growing.
Again, as you look at the market share, we're probably majority, are market leader in most of the markets that we operate in. Becoming the world's first low-cost carrier network, exploring hubs in the Middle East and Europe. Bahrain as a strategic gateway, as you can see, a lot of our group CEOs are heading there to just see what we can do in terms of connecting, bringing traffic with a stop in Bahrain onwards to Europe. Also narrow body global reach spanning yield pools while maintaining lower costs, Rakan, and also integrating scheduling and a multi-hub operations to create seamless passenger operations. Basically, the strategy is to find a hub somewhere, whether it's Bahrain or Central Asia, with a one-stop connection into bigger markets.
For example, we can go now from Central Asia or from Bahrain to Europe, or vice versa into, well, down the road, not yet, but into the United States if ever. Aviation business acquisition final phases. This one, as you're aware, price fixings was announced, I think, about a week or so ago, and we are targeting for a completion of the exercise, AirAsia X turning to a pure play, enlarged aviation business. Again, into the targets for 2025. Everything is on track, looking good. I think as we come into the fourth quarter, without sounding very optimistic, I think we will probably exceed our forecast for the whole year, looking at the trends that we're going into the fourth quarter. I think we are on track, and I think, for the doubters there, I think we're doing quite well.
Again, just to ensuring, we expect to achieve above targets. Seasonality, as I said, fourth quarter remains strong. Operational fleet size, expect to have 18 operational by December. Network stabilization, expect to add more connections to Southeast Asia and Central Asia region. Also aircraft vintage, expect high aircraft maintenance checks for the fall. Again, as I explained in last quarters, the C checks and all that, a lot of the main checks has been done towards last year and the year before. I think this year is more towards the minor C checks that usually will take about two weeks, and that'll be out. We don't see much disruption in the fleet as we speak. Other than that, appendix is just a nine-month snapshot. Thank you very much, everybody. We can just go to Q&As.
Hi, everyone. Thank you, Ben. Hi, everyone. As usual, Matthew, you have already raised your hand. The queue is open now, if you would like to raise your hand and ask your question. Or if you prefer, you could also put your question in the chat. I think we can start with SK on the chat box. Hi, Ben. I noticed the group's unrecognized share of TAAX rises. Just wondering, are there any plans for TAAX, especially after the short-haul corporate exercise?
At the moment, I think, as you know, the unrecognized losses has increased with the losses that they posted in 3Q. But at the moment, there is no plans. They are reviewing their network as we speak because it has been a tough market. I think giving you weight. I think TAAX in Thailand has been very affected, so they may look at optimizing their fleet to see where they can fly best to make money. So at the moment, it is just more about trying to fine-tune their 2026 network.
Hi, Matthew. You can unmute and speak your question.
Yeah. Hi all. Thanks for the call. I got a few questions. Firstly, could you provide some color on the forward booking load factor for the fourth quarter? Should we see an increase from the 82%?
Yeah. I think it should be. I think we're, without giving you too much guidance, it will be higher. And obviously the fare, generally, fourth quarter will also be higher. So yeah, looking strong.
My next question is, how has the route to Istanbul and Tashkent been performing in terms of load factor in the third quarter? And maybe also provide some guidance to us in the fourth quarter.
Tashkent is okay. It's been a slow burn for the first one month. But going into December, looks fairly strong. So looks okay. For Istanbul, we didn't operate it in third quarter. We only operate it in the fourth. We only started in November. So, it is going as planned, but a little bit more work that needs to be done out of Malaysia. A lot of the traffic is coming from Istanbul. If you look at the passenger split, 60%, or actually 65% is POS. Oh, sorry. No, you don't know what it means. Point of sale, Istanbul, while 35% is point of sale Malaysia. So we need to build out a bit more presence in Malaysia and also the retail to fly out. But looking into heading into December, it's as expected into our forecast. We are very conservative on our forecast for the first few months.
I think not a lot of people know about Istanbul yet, but we're trying hard to try to market that more.
Mm-hmm. Sorry.
Is there a number on the load factor so far? Are you unable to give the number?
I have a number on the load factor, but I will not be sharing what I was saying around the seventies.
I see. All right.
Okay.
Maybe a third question, drilling a bit more on the recent cancellation of flights from China passengers to Japan. Are you able to provide us the quantum of an increase in passenger bookings between Malaysia and China and maybe also on Thailand and China?
Without sounding too— At the end of the day, that is something that is unfortunate. We want to make sure that people fly out of China to go to everywhere. But I think with the tensions that is between the two countries, a lot of people are moving towards Southeast Asia and ASEAN. We are also a beneficiary also of the spillover of people avoiding Thailand as well. So you get that double whammy of those two markets coming to us. It is actually a positive side. You are looking into our China loads. It is actually exceeded expectations when we thought that the third quarter will be very, very light. That has done very well for us. So, we hope that continues on.
But obviously, as a group-wide, I have to make sure also that THAI and all the other entities who are suffering from it, they need to make sure they build more marketing to build those traffic and to ensure passengers that are scared to go out. But on our side, I am happy with the performance of China.
Is it generally higher than the 82% load factor?
Yes.
All right. Do you actually see a recovery between China and the Thai routes for TAAX?
Sorry, say it again.
Do you see a recovery between China and Thailand routes on TAAX side?
I am not close to it. I am not close to the numbers, but what I see just based on their performance on the high level top-line numbers, it is still where it is. It has not really improved.
Even on the forward booking numbers in the fourth quarter?
Yeah. October went up a little bit because of Golden Week, but that's just a one-off blitz.
I see. Lastly, before I jump back in the queue, is there a timeline on your establishing of your Middle East hubs?
No. We are working on next year. We're just fine-tuning our budget. Potentially, out of it will probably be our one destination that we're looking at from one stop through Middle East.
All right. Thanks. I will jump back in the queue.
Okay.
Right.
Okay.
Perfect.
Huh?
Can you read that again?
No.
Perfect.
How far are we?
Sorry, AlphaResearch. I am reading your thing.
No, we can look at it.
Yeah.
That's giving guidance really. I think we have no problem. I think we will achieve. Especially our strongest quarter, as I gave guidance this time for the loads and the fare, we're on the right track.
Hi, Daniel.
Hi.
You read the presentation already, right, Daniel? That's why you ask me.
Yeah, I read your presentation already. All right. This line is very good on time. First question, I saw your industry breakdown. Can I go back to the industry breakdown? This seems to be a very large part of others under industry breakdown, 59%. Can you give a more breakdown on what are these industry breakdown?
The others is basically-
It can be. It's less than 4%.
Huh?
It's 4%.
Yeah.
The others, that makes a big chunk of it.
Yeah. So the duty-free has gone up quite a bit.
How much? Duty-free how much percentage there?
Yeah. Can you just give it to me what the numbers?
Hi, Daniel.
Yeah.
Inside the others, it's everything else, right? Apart from what you see, feed, meal, and baggage. You've got your insurance is inside, your duty-free pre-booked on board, those are all inside. All your cancellation fees, your administrative fees, everything else under the sun is inside.
Yeah.
If you want the breakdown, I can share it to you afterwards.
Yeah, sure.
A lot of it is driven by duty-free.
Yes.
Duty-free actually has done quite well. Also in my monthly review with commercial, Tune Protect in terms of take-ups also has actually jumped quite high. So there's a lot more people taking travel insurance flying with us, which is good.
Okay. Another question is, now that Thailand has this flood issues or this, how does it affect your operations?
Which operations? My operations-
Thailand.
In terms of Malaysia or in terms of Thailand?
Thailand. They have flood in Thailand, right?
I don't fly to Thailand.
No. THAI is in Thailand.
Yeah. So far it's business as usual. They don't fly to Hat Yai. They're out of Don Mueang. They go to those markets. So far, I see the weekly updates and the safety review. I don't see any delays due to flood.
Okay. No delays, but do you still use this lowering, slower numbers of bookings for this?
No. As it is really, they're really at the low end. I don't see any lower. So far it has been hovering at the same levels.
Does that mean that AAX next quarter is continuing to be loss-making?
I do not know. Generally, their fourth quarter is fairly strong. Let us see. I look at their forward loads, it looks okay. Whether there will be last-minute cancellations or not, I cannot quote, but I think they look quite okay. In the fourth quarter, they are struggling to make money.
Yeah, everyone is forgetting the money. Just checking to see whether these are internal effects or so-called target.
Yes.
We also have a No, before that we have the chat box. I noticed there was massive increase in the China-Malaysia route served by Chinese airlines. Will this be a threat to-
So far, yes, there will be, but some of the markets that they fly to are markets that does not fly to me. There is more than enough demand. The POS Malaysia market, generally, you see the people going into China also prolonging are from Malaysia. A lot of those are in favor of Malaysian carriers. Obviously, there are also the Chinese that come in, but so far, I have not been briefed that the fact that there is a fair pressure or load factor pressure. In the last four months or five months, our load still remains fairly strong, which means that there is enough capacity to absorb the increased capacity.
Hi, Tashi Delek. Who would like to
Hi, thank you. Hi, Ben. Long time no see.
Yeah, long time no see.
Hope you're doing well.
You retired already?
Sorry?
I thought you retired already.
No, I'm still around, man. Aging. Just a quick question. I'm just curious, seeing the losses of Thai Air, your ex-client. What has been the key drag on its performance? Where else the national carriers are pumping all-time high profits? Yeah, right. Where's the last point? Thanks.
I think you got to realize that I have an answer for you. You got to realize that Thai Air has came from the other side of the spectrum. They were loss-making for the longest time.
Yes.
Again, some of their markets are European markets, and it is a bit different. But the markets that we predominantly focus on here are the markets that Thailand has issues with. If you know the Korea and Thailand demand has fallen down a bit due to concerns about flying and also the relationship there. Also China as well is coming in, is shying away from Thailand. As you know, there is all the kidnappings and all that kind of stuff happening, so that does not break. The border constraint has not helped as well. These are all the kind of things that have happened. The markets that they fly to, as you can see, 80% is those markets. A lot of capacity is Incheon. The other capacity you can see is Nagoya, Six, and Narita, and Sapporo. But Sapporo is not to worry because that is an inbound traffic.
The Thais are going there. And the other one is Shanghai. Those are the markets that are really troubling them. If you are looking at Thai Airways, their market is slightly more diverse. They have, of course, all the network. They have the domestic market. They have also the ASEAN market. You can say that they can absorb a bit of the losses and probably make money on the other side.
Okay. Thank you.
Thank you.
We have more questions from May. May I check how AAX is funding its working capital needs since AAX has not been injecting capital and AAX has not been generating profit? I am trying to understand how operations are being performed.
Well, at the end of the day-to-day operations, as you know, it is all about managing cash flows. We were in the same position a few years back. We were also managing cash flows. Again, it is about relationship with your lessors, relationship with your vendors and the airports, and giving them payment plans and all that kind of stuff. So at the end of the day, you got to realize that if you follow us very well, TAAX years in the past has always been the star performer. They has historically always talked about 89%-90% load factors. Fares are usually higher. The traffic into Thailand has always been on that side. Cassidy would know this. Thailand is just a natural tourism hub. Therefore, they have always had enough cash flows in there to survive. It is just now you just got to be prudent in your spending.
Really, I think to me, it is just a short-term blip. As you know, as you read in the newspapers and all that stuff.
Thailand government is pushing Thailand tourism. There is a lot of things coming, going on in Thailand the next few months and years. The F1 is coming, this is coming, that is coming. Everything is coming there. So I think there is a lot of opportunities there. I am not too worried about Thailand, really, because I have seen this before. They will always bounce back stronger.
Hi, Matthew.
My next question is, I noticed the MRO cost rose 8% Q on Q. Could you give us some color on this, and what should we look at going ahead? There should be less aircraft going to checks, right?
Yeah, on a year-to-year basis, we took one extra plane. That's it, really.
Okay.
Also just a bit of escalation.
Annual escalation.
annual escalations on-
Outbreaks
outbreaks.
MRO and-
Yeah. Maintenance and all that. Nothing out of the ordinary.
Actually, what is the run rate for this going ahead into the fourth quarter and maybe next year? Could you guide us on that?
I do not think it will increase that much. Probably, maybe in June, July next year, there will probably be a jump as we send those planes into reconfigurations. But other than that, in terms of annual business operations, it should just fluctuate up and down due to less C-checks or up and more C-checks as we deal. Nothing I am expecting that is out of the ordinary. As the market now, in terms of maintenance, has normalized. Before, back in the days, we were just ramping up a lot of our spares. We were doing a lot of engines. We had a lot of landing gears due for checks. We had more MROs, big checks. That has actually toned down quite a bit. What is left now is just minor checks that really it is. I do not think there will be We prepared last year and all that.
The numbers are actually higher, so I think we are actually quite okay.
So it could be roughly around MYR 140 million - MYR 150 million per quarter?
I don't know. That's something that I don't want to give that guidance there.
All right. Then not to worry. Maybe another question from me is, could you give us some color on the sensitivity of your earnings towards USD-MYR and also the office?
I think in terms of the sensitivity of the currency, not much. At the end of the day, we're about 40%-50% of our cost is U.S. dollars. Also, you also have to realize that a lot of our revenues coming in also is a natural hedge. 60% of that is foreign currency. So we don't see much impact on that. Even on the finance side, we do buy some dollars and all that, just to keep on the safe side. But really, we don't see that fluctuation. In terms of fuel, I think we don't hedge at the moment. So really, we just work on spot and try to work on just saving costs through tankering flights to lower markets and all that.
Any plans on hedging your oil?
No. No plans at the moment. I think we just want to do it at spot at the moment because that can fluctuate quite a bit, so we don't want to be out of pocket.
All right. Thanks.
Hi, Catherine. Your hand is raised. Can I check if you have a question or Okay.
Sorry, I forgot to lower my hand, but since you called me up. Is Thai AirAsia X exiting the bankruptcy protection anytime soon? Thank you.
Yeah. Based on the board meeting that we have, they are hopefully doing it. Hopefully, by next year, they are on target already. Their plan in terms of paying back a lot of the outstanding debt that we owed. I think they are about 60% there. I think next year, probably they will be exiting that quite quickly.
I can also take that question because I am driving it. I am actually going to Bangkok on Monday–
–to finalize the acquisition as well with the TAAX. I am putting both together, including merging Thai AirAsia and Thai AirAsia X. I am going to speed it up, actually. The 1 billion THB of capital that we are going to put in quicker, and then we are going to go to the courts to try and exit it faster than the intended date. I would hope to get that all done by the middle of next year. We will announce the plan on Thai AirAsia and Thai AirAsia X.
Got it. Thank you.
Any further questions? Any more questions, guys? On that note, thanks, guys. I think just as I slowly repeat and highlight, I think it's been a good quarter for us. On the positive side, I think fair has moved up quite a bit. In terms of loads, as we move into more longer routes and some of the utilization of the shorter routes that we moved to AK. As you can see, as a group, that we're just making sure as a group revenue, that's increasing as it is, as we move towards more frequencies towards some of the routes that we have tactical move that we have. In general, I think moving to the fourth quarter, it looks strong. We will exceed our forecast. Moving, I think loads and also fare is on the high side.
Moving into that, I think thank you very much again, guys, for joining. Any questions, Jane will be there to answer.
Yeah, just to add one more point, from the group perspective, is that the beginning of the transformation of two airlines into one is taking place, in terms of using the A330s
For longer routes and replacing the shorter routes with the A321neo LR and A321XLR, which will increase more efficiency around the group. The other point that we're seeing in AirAsia is the massive opportunity that the longer-haul airlines bring through connectivity. AirAsia's interlining growth has grown by 16% year- on- year, and that's a very profitable part. The synergies between AirAsia X and AirAsia are really coming together in this quarter and really will grow tremendously in 2026. One more point, which I'm sure Ben mentioned, but also the similarity of the aircraft. We're in the process now of getting all our aircraft to 377 seats. That in itself will add a couple of points to the margin as we have four different types of aircraft with different business class and seating configuration.
Now that we're exiting this financial turbulence and we have more cash on hand, we'll be accelerating reconfiguring the aircraft, and that will appear to AirAsia X as a profitability going forward.
I have one question.
Yeah. I think with Teleport, as you know, that in totality, in Teleport revenues is always an increase on the year-on-year basis. But I think this year, I think due to just slow demand into the third, it looks it is down. But I think we sat with the team. I think looking to the fourth, some of the routes that we're doing in terms of optimizing that is looking strong, especially going to Australia and also China. Those are usually the top routes for us in Japan. I think going to the fourth, they will rebound in terms of the revenue.