Everyone, good evening. Thank you for joining us for the AAX second quarter 2025 financial results release. Together with us, we have CEO, Ben, and online, we've got CFO, Lavinia, with us this evening. Ben, over to you.
Right. Good evening, everybody. I apologize for the 15 minutes late. We just finished the board meeting. Again, thanks, Jane. Thank you, everybody, for joining our second quarter 2025 results release. Looking at page three on the presentation, we posted a net profit of MYR 35.22 million, buoyed by favorable foreign exchange gains. Net operating profit also improved by 26% year-on-year to MYR 1.38 million, boosted by lower jet fuel prices. Revenue stood at about MYR 660.8 million, marginally lower by 1% year-on-year, really driven by just the low season and also low fare environment. Average base fare compared at MYR 405, with ancillary RPP increase 4% to MYR 257, with us carrying about 60% more passengers. Passengers load factor, very healthy at 83%, as capacity in line also with an increase in capacity 6% year-on-year. Again, with also 6% passengers, which carried over 935,000 passengers.
Again, second quarter usually is a tough one, but it was managed with load active yield capacity strategy, also leveraging on a very good fuel environment. Seat capacity up 10% year-on-year with more aircraft and additional routes in the network this year. Again, 18 or 19 aircraft activated. The final aircraft, RTS, again, was deferred to the second half of the year. Again, with prolonged global supply chains, which we'll still continue to push. CASK benefited from a lower fuel price with a 30% year-on-year improvement to MYR 0.1205, while cost ex fuel was up 9% year-on-year to MYR 0.0638, with expanded operations since last year. Network is robust with recovery noted in China with PLF close to about 90%, and recently announced our route to Tashkent to continue growing our Central Asia market. Obviously, one foot into Europe, with the announcement of Istanbul towards November this year.
Our associate, TAAX, reported a revenue of MYR 372.82 million and an operating loss of MYR 13.2 million due to softer travel demand to Thailand, generally following the earthquake incident and also related security concerns in Bangkok. Number of passengers carried reduced by 12% year-on-year to over 318,000 passengers, resulting in a PLF of 78% for the quarter. Again, on the proposed acquisition of AirAsia Airlines, we are advancing towards the procurement of clearance with Thai SEC, so that's still in the works. Also, the conclusion of private placements and Capital A continues to work on securing lessor's consent as that is just around the corner. Just to the financial highlights. Revenue stood at about MYR 660.8 million, marginally down 1% year-on-year. This is 6% lower scheduled flight revenue with highest 6% passenger traffic, driven by lower base fares and also lower fuel prices.
Freight revenue also reduced by 20% due to lower yield in the market. Also, I guess, with the tariffs in America, the demand kind of slowed a little bit towards this quarter. Mitigated by ancillary revenue growing 10% year-on-year, with ancillary RPP up 4% year-on-year with 257. EBITDA strong at 76.2, up 31% year-on-year, improved due to lower fuel prices, reduction in lease expenses and also operational expansions, increased costs for staff, maintenance, user charges, maintenance and marketing expenses. Net profit rose sharply to MYR 35.2 million from MYR 4.8 million in second quarter 2024 due to net foreign exchange gains as it is. Seat capacity increased 6% year-on-year to over 1.1 million seats as the number of operational aircraft grew to 18 from 16.
Load factor, as I mentioned earlier, remains very healthy at 83%, as the number of passengers increased by 6%, tracking capacity expansion despite second quarter being traditionally soft travel season. ASK grew by 10%, driven by 5% year-on-year sectors flown to three overseas sectors, driven by network expansion, which is very aggressive, especially with the addition of Chongqing and Karachi, Pakistan, and also increasing frequencies on some of our routes. Just an overview of our operating expenses. I think as you can see now, as we spoke in a couple of quarters, you can see now it's starting to normalize. Total operating expenses reduced 5% year-on-year. It may be driven by lower fuel prices, and also higher consumption due to high consumption of fuel, and also the appreciation of the Malaysian ringgit compared to last year.
Offset by the rise in maintenance of all expenses and user charges, especially expanded in the last 12 months. Also other operating expenses increased MYR 33 million due to, as we know, we're starting new routes this year and also commercial initiatives that we go in driving sales for the business. I know this slide is always in our presentation. Just want to keep highlighting that we still remain the lowest cost structure airline in the industry with the lowest CASK, driven really by high utilization of our IT fleets. We're currently probably posting close to 14 hours, prudent cost management by the team, and also currency upside that we potentially can have. Ancillary revenue continued to outperform, recorded at MYR 240.27 million in second quarter 2025. It's a 36% contribution from the total revenue. This is also driven by increasing passengers as well.
Also ancillary RPP recorded 257 during the quarter, marking a 4% increase. Again, this is driven by the team, its dynamic pricing and also strategy, and also AI that we've been doing through our web. That's driven due to higher take-up in travel upgrade options, in-flight service offerings, baggage, and everything else that potentially that is on offer on our flights. Just a brief through on Thai AirAsia X. Revenue stood at about MYR 372 million, posting an operating loss of MYR 13.2 million. Again, unfortunately, Thailand is going through a tough, difficult period with all kinds of issues there, especially with the earthquake and also security concerns, and also the slowdown in China markets. EBITDA also reduced by 50%, to MYR 21.57 million due to higher operating expenses.
Higher staff costs related to increased flight allowances and engineering manpower charge backs hit together by aircraft fuel expenses due to lower jet fuel prices and also increasing MRO costs due to additional aircraft and utilization and higher escalation rate as well. Just a bit more on the operational highlights. The seat capacity stood at about 407,360,000 seats, compared to the previous year following capacity management measures partly driven by ACMI operations during Hajj. During the quarter, passengers carried was 318,257, with PLF at 78% due to softer travel demand and temporary market headwinds in Thailand. Again, this is what our strengths are for the business. 24 destinations added to Karachi and Chongqing in the last 12 months. Recovery in China, load factor over 90%. Over seven weekly flights for close to 50% of our network.
Growing Central Asia, with Almaty being a success with increased frequency and also adding Tashkent in October. Also flying Istanbul, tapping into all the opportunities of Fly-Thrus into Australia, Indonesia, and the Philippines. Our Fly-Thru is growing exponentially as well in a rate of about 20%, with an internal target of about 30. Our network begins to grow within the group. 143 destinations, 292 routes, 99 unique routes where nobody else flies, 15 hubs, and of course, 90 million guests flowing for the whole organization. The immediate outlook for us, again, is just focusing on enhancing network across more regions, continuing to operate high profitable routes. There are routes that we've unfortunately tried and we've removed, but generally 80% of my routes are profitable.
We are also looking in terms of fleet planning, working closely with the MRO partners, ADE and also others, to just complete our final phase of our fleet reactivation, ensuring that all the work has been done. I think this is a bit delayed, but unfortunately, that's something that we have to put up with. Also with the commercial plans, we also work together with our commercial centralized functions where we make sure that our promotion activities in the near future is well-tuned with our business strategy, through targeted marketing and also optimization together with Capital A, and also building our Fly-Thru traffic and incorporation of new products and partnerships as well. We continue to still have a strong relationship with Teleport despite revenue downside for just this quarter due to the trade service announcements.
On the positive side, we should be going towards a third and a very strong fourth quarter for Teleport and cargo as well. In terms of corporate focus area, again, we are just nearly around the corner, just on the final stage again. I keep saying that, but we're just on the final stage already. It's just more on the final to get a final approval, especially on the proposed acquisition due to complete anytime soon in terms of the CPs. The Thai SEC is pretty much coming through. Internal targets, I can safely say we're still on target. Despite second quarter being a very low lead quarter, that's pretty much expected.
But I think moving into third and fourth, looking at the forward loads and also the fare, we look pretty strong for achieving our internal targets as what we guided at the start of the year. Again, seasonality, fourth quarter is going to be a very strong quarter for us as usual. Also operational fleet size, we should have 19 aircraft by December. Also network optimization. They expect to add more connection to South Asia and Central Asia region. Also aircraft costs, potentially maintenance may look it is trending down as it is, as I mentioned in the last couple of calls. Most of the C checks have been done towards last year and this year. I think it should slow down by next year, generally as it is. But potentially, we could see a lower cost structure for that. But that is it, really.
Again, thank you very much. Sorry, I may not sound very excited, but I think I just had a very long board meeting since 1:00. But I think I am quite happy with the results. Again, we continue to make money, continue to be profitable, and we have done well for a medium long-haul airline to ensure that this business is proven. With our destinations that we fly to, we can make money, generally in most of our destinations. So again, to all of you, thanks for all your support. It should be another good, strong first half and heading into a very strong second half of the year for AirAsia X. Thanks, everybody.
Thank you, Ben. So everyone, as usual, now we move into the Q&A session. If you have any questions, you may proceed to click on the Raise Your Hand feature and speak when called upon, or if you prefer, you may insert your questions in the chat box. Thank you. Okay, Xian.
Hello. Hello, management. Thank you very much for your hard work, especially on the operating metrics.
Yes.
The use of it is fantastic. Looking at the cost structure, I think you are able to break even your profits partly helped by the Forex and oil price. What could you done better in terms of the cost control? Just trying to visualize going into second half, especially your third quarter, would you be able to generate even better profit, assuming the airfare environment is still favorable?
Yeah, I think in terms of the cost structure, I think, the only thing that potentially will improve will be the maintenance overhaul. As I said earlier, I think, if you can compare to last year, probably towards the second half of last year, you see the costs a bit more inflated only because there's a lot of aircraft waiting for checks. I think the improvement mainly will be driven by that. The others, really, you won't see much really. As we grow, staff will increase. We have to get more pilots and crew. Fuel, if the environment improves, fuel price benefits, then it will be greater for us. Every other things is really not much. I think, as you can see, our cost structure, we're pretty much quite lean. The only thing that we can do is just trying to reduce that maintenance, as I said.
Again, we have to make sure that we also drive revenue. Obviously, second quarter was lean. You know this, if you've followed us for quite a while, second quarter has always been like this. But usually we'll bounce back in third and of course, do record sales in fourth first, right? Not to worry. We'll recover all those anyway in due time.
Sorry, just to understand, looking at your in-route costs-
Can you speak louder? You are very soft, your voice.
Yeah, it is a bit noisy here. A lot of kids outing.
A lot of kids.
Yeah. Just trying to understand on your MRO cost, especially the maintenance and overhaul.
Yeah, I think quarter-on-quarter it has actually improved.
It's been down, right?
Yeah. How should we look at it, going into third and fourth quarter? Because my assumption is that you have done majority of the C check, especially for last aircraft, which is still pending for activation, right? How should we look at the cost going forward? Because I think, that's the only part of the cost that you can improve further. Just to understand.
Yeah.
Also give us some color on the operating environment as we go into third quarter and fourth quarter.
Yeah. I mean, maintenance and overhaul, I think, I do not want to give you too much guidance, but I can say that going into third quarter, that number will continue to fall. As third quarter, we had somehow less aircraft going into checks. But moving into fourth, we have a few coming in. We have few big checks that are coming out, and potentially that last aircraft that may be serviceable by then. But obviously, fourth quarter will go up again, but it should be normalized around this region anyway. But third should be lower. In terms of others, as I said, this is very tough. Not much, as we are pretty much lean. We have a very lean structure, even in terms of the, you compare to our costs versus AirAsia, we are way lower as well.
But in terms of operating environment, I think it has been quite a bit of all kinds of stuff happening in my market. I think I could have done better in the second quarter, especially in some markets. One of the markets that surprised me in terms of decline was Japan. Generally, Japan, my load factor overall towards every year, every month is about 95%. But for the second quarter this year, my Japan load factor was only 72%, only because people did not want to travel to Japan in the second quarter because of that, what? Manga. The manga comic that predicted Japan is going to have an earthquake and that. Therefore, there was a huge decline of sales, huge people moving flights and refunds and all that kind of stuff. Obviously now, that has gone. Sales have gone up again in Japan.
We are recording a 97% load factor for Japan towards this long weekend coming up. And of course, travel fair over the weekend in Bukit Jalil, the top seller was Japan. It is just funny how news and scares has affected people in traveling. But generally, I think that is really why our fares have fallen down quite a bit. And of course, China a little bit. There is a bit of a slowdown also towards second because of the trade wars and all that kind of stuff. But I think that will just die away in time anyway. I am not too worried too much. I think that just recover as we speak, moving into third and fourth.
Yeah. On this topic on the China market, right? Just trying to understand, because recently China also kind of resumed their routes to India. I assume this will help to improve the view a little bit going forward, right, as they put a bit capacity for China-
Increase their routes to India?
They tried to. Recently on news, they were saying that they will resume some routes to India.
I think that one, I don't think it will impact us that much. I don't know whether you're asking me whether it's positive news or negative news. It doesn't impact us at all because a lot of the traffic that comes from China is point-to-point. Also not just point-to-point, it's point-to-point to ASEAN regions only. A lot of Chinese people are coming in via KL, connecting to Bali, Thailand.
Okay
You don't see many people going down south and going up north back to India, right?
Yeah. Okay.
The border is right next to each other. No impact on that.
Okay. It is a blessing in disguise that you do not have to record the Thailand operation in your P&L. I understand this. Just trying to understand whether there is some spillover effect, especially from China's side, as they do not travel to Thailand. Would you benefit from this end?
If you ask me, we benefit quite a lot actually. A lot of people are coming over to Malaysia, but obviously Thailand also is 49% owned for me. It is sad for them that they are not getting that traffic. We do get a lot of people moving over to us, especially the Chinese market, towards Malaysia.
Okay. I will jump back to queue. Thank you very much.
Thanks.
We have questions in the chat box. "May I kindly follow up regarding the $1 billion private placement?
That is pretty much done. I think we are just waiting for a few more approvals. I think that is all been identified, so there is no worry. We are not concerned about that. I think we are just waiting for Thai SEC approval. Again, I do not think there is an issue. It is just more clarity on those of what we are doing and all that kind of stuff. I think we are targeting that pretty much soon, again, within weeks. But other than that, I think even on the CPs side, I think we probably only have one or two left in terms of getting that approval. But other than that, I think we are on the right track.
Yes. Just a follow-up on CPs and the Thai SEC's progress.
Is there any update on revised timeline?
No. I think we hopefully should be completed by next month.
That is all in the chat box for now.
The guidance for NOP is between MYR 157 million to MYR 220 million, and year to date is MYR 52 million, which is 33% done. Is that right?
Yep. Correct me if I'm wrong. Guided NOP. Where's my guidance? In terms of, I'm not going to give you much color on that, but I think generally looking at what we guided when we spoke to the board meeting today, I think that looks quite a reasonable target. I think we should be okay. Especially, I think in third and fourth. Generally, I think bulk of our profits are coming towards third and fourth anyway. Mm-hmm.
Hi, Matthew.
Yeah. Hi, management. Thank you for the call. I noticed your fares also this quarter is down around 11%, and last quarter was also down, I think 15% year-on-year. Should we expect this type of trends going forward for the second half of the year?
Did you say first quarter 15%? I don't think so.
No, 15. 15, I think. 15.
Oh, okay.
Yeah. I think-
Yeah. I think as I said in the last call, I think first quarter, as you know, we're just coming up from a very high fare environment, right? So generally, I think if you want to look back towards 2000 pre-COVID rates in terms of fares, we're still 20% higher than pre-COVID. But, yeah, I think as we grow, I think as you can see, our capacity also has increased quite a bit. It's not flat. As you can see, our capacity has been increasing in double digits. So generally, you would see a bit of a dilution in the fares. I don't know about third. I think we're looking, we're trending quite okay. But let's see. But I think moving towards fourth, I think should be quite strong. But, yeah, that's all I can say.
All right. Maybe, could give us some color on the forward booking load factor in the third quarter since it's really, I think, mainly end August and upcoming September. I believe there's three long-
I can tell you that it'll be in 80s. That's for sure. I'm trying to squeeze the team towards mid 80s. I think that looks achievable. I think we're nearly there, but let's see. For sure, we're in the 80s.
How's the reception like on the new routes to Istanbul and Tashkent at the moment?
It's been good, actually. Tashkent has done well, but Istanbul was better. I think on the immediate day that we launched it, we sold close to about 2,000 tickets. But it's been good. Yeah, quite excited, actually. It's just unfortunately, it's a very long flight. Yeah, I think hopefully it should be good.
All right. Thank you. I jump back into the queue.
We're good, guys. Any more further questions?
Hi.
Stephen.
Hello.
Oh.
Hey, it's Daniel here.
Oh, I thought you were MC. It's okay.
Sorry. I just want to understand how is the yield trends like. I know this year yield for this quarter is actually down, quarter-over-quarter is down quite more than your cost down on a quarter-over-quarter basis. I would expect your revenue to drop less than your cost drop because you are going
Correct
to get the benefit of the lower fuel and also the exchange rate.
Actually, Daniel, as I said earlier, I think, actually everything else in terms of my other routes and destinations outperformed, in terms of yields. The only two markets that really impacted me towards second quarter was Japan and China. Japan, again, as I repeated just now earlier, is because of the damn manga news that came out that everybody didn't want to travel. So I've never seen my load factor for Japan in the low 70s. Japan has always been our top performer. So generally, in the whole manner, second quarter, our load was 70s. And in the past, our load factor for Japan average would be about 88%-90%. So that is a big contribution to the decline.
In China, I think with the trade war that was happening and the trade rates and all that, I think we saw a bit of an uncertainty in that market for a bit. Even though the load factor was quite okay, we needed to stimulate. The reason only why it's high, because we stimulate it through fare. We push travel, and a lot of the traffic that you see flying into China is mainly from Malaysia. Generally, you see in the past, a lot of the traffic is coming from China. So I can only say it's because of those two, to be honest. But my other routes, Australia outperformed, Almaty outperformed, India outperformed, Korea outperformed. Yeah, so they've done quite well, actually. Just those two.
Okay. Again, if I understand, the Japan manga thing, I thought it is more on a July factor. I mean,
No, the second quarter.
Huh?
In May, June, yeah. But the whole people didn't want to fly because the whole time it was during that period.
Oh, yeah.
Just the lead up to it, they did not want to know. They did not know when the earthquake was going to be, right? They were leading up to it, leading to it. After that, the sales improved. I do not know why. Weird.
I see. We are expecting at third quarter your yield to improve. Is this a significant improvement or
It should be better than second quarter.
Should be better. Are we looking at similar to the first quarter level or just in the middle?
The first quarter, a bit tough. First quarter and the fourth quarter is very strong, right?
We are looking at more on the mid of between first and second quarter.
Mm. Maybe.
Then in terms of the cost structure, are we expecting your cost structure to further slow down per ASK basis in coming quarters?
I explained to you earlier, I think the further improvements you will see in the third quarter is the maintenance overall.
Maintenance overall.
Yeah. I think as I explained this out in the Q&A, it is now basically, there is less C check that we did in third quarter, so you will see that to lower down further. That is the only thing that I see there being an improvement on us, unless fuel and currency improve, then you see that even lower. But in terms of the controllable ones, maintenance and overhaul.
But I noticed that your maintenance overhaul has already improved from MYR 400 million in the first quarter to MYR 140 million.
Yeah. It is going to come down a bit further.
It is going to come down further in third quarter?
Yeah, because like I told you in the last call, remember I explained to you, right? There is so many checks in the system. Third quarter, we are doing less checks. So that is going to be reduced. Fourth quarter, we have one more, I think one check in an aircraft that is coming back into service. Also in December, the hours flown for December will be very peak. So, a lot of our engines that is charged on a per-hour basis towards Rolls-Royce, that will go up. So that will come up towards fourth quarter. But third, generally low seasons, we fly less as well generally, and therefore you will see the hours less and also the maintenance.
Okay. Can I check on your non-operating aircraft? You only have one non-operating aircraft at this moment?
Non-operating aircraft that has been grounded so far, yes, one, but we also have two other aircraft that is grounded at MRO.
At MRO.
Yeah.
I am looking at your numbers there, 1.9 million and 1.1 million. Is it for one aircraft only or for these three aircraft?
What 1.9 million? Sorry?
1.9 million in the current quarter. 1.9 million, the non-depreciation and the finance cost, this already MYR 1.1 million.
Oh, no, this is different. This is basically telling you what's the aircraft left for the What's this for? This 1.9?
Yes, 1.9, 1.1. Is this related to one aircraft only, or you're relating to three aircraft?
This 1.9 is related to one aircraft, while 3.8 is related to two.
Yeah. 1.1 is related to two?
No, 1.9 is related to one.
Okay. 1.1?
What 1.1?
Finance cost.
One also.
It is 1:1.
Okay. I see.
I do not understand. This is not linked to a not-flying aircraft, though. This is just board depreciation in terms of how you classify it.
I am thinking when will this become your, so-called, the increasing of your number of aircraft to contribute to your revenue.
One and one. One actually. Sorry?
One-
Sorry, go ahead.
It's one aircraft, correct?
Yeah. One.
One aircraft. Okay. In the third quarter and fourth quarter, basically you're going to increase aircraft capacity or there's more aircraft coming in, you are going to deploy to which segment? Which area? Which region?
Oh, in the presentation, I said Tashkent and Turkey.
Oh, you went to Tashkent. Sorry, I don't have the presentation slide.
Oh, where? Oh.
Daniel, we sent to you already. I send you on the link.
On the-
Yes. It is in your WhatsApp and on your email.
In my WhatsApp, in my email. I will check.
Yes.
Okay.
Thank you.
Thank you. We go again. Okay. That's all from me. Thank you.
Okay. All right, everybody.
Hi, Ben.
All right.
Yeah. With optimization of routes, can you push up the yield a little bit higher?
I will try.
Just by the Yeah.
Okay.
Okay. Just to-
Okay. If tomorrow I sell the fares higher, would you buy?
I do not know.
I will try.
Yeah. Okay.
That is my KPI as well.
Yeah. Second quarter should be the worst, right?
No, I do not think so. I think if you look at last quarter, the fares were quite reasonable drop. As I said, when I look and I analyze the second quarter this year, I also was wondering why the fares were down. There is three factors actually that drove. I told you already the manga thing.
The other one is China, and the other one is also our revenue in terms of the cargo.
You see a swing of MYR 20 million out already. That's really what has driven through our revenue numbers. But generally, I think that should improve towards third.
Okay. Thank you.
Hi, Matthew.
Yeah. Any impact on AirAsia from this CORSIA surcharge, I think. Go ahead.
No. In the coming months, you will hear that we will probably start making some announcements in terms of that. I do not know whether Tony has highlighted or wherever the fact, we may start looking at charging already passengers on the carbon surcharge thing, carbon emission rates. We are just finalizing all the approvals for that. We are looking to putting that into our ticket fares.
Oh, so it is being pushed forward to the customers, is it?
Yeah.
AirAsia X wouldn't incur any additional cost from this?
No.
Okay. All right. Thanks.
Okay. All right, everybody. Thanks for everything. Again, if there are any questions, then just email the IR team. I am more than happy to reply. If you want to catch up for a meeting as well, do let us know. Do come over to the office. Just to, I think we should be going into a third from third quarter and fourth. Again, the key focus is to make sure that the company remains profitable. I think we have done that quite well. I think we are in line for our guidance, too. Again, thanks again for calling in. I will see you guys around. Take care.