Everyone, thank you for joining us today for the AirAsia X third quarter financial results. In the room, we have Chief Executive Officer, Ben, who will be sharing about the results with all of you. Over to you, Ben.
Hi, everybody. Good evening. Welcome to our third quarter results. Just want to wish you guys, whoever celebrates it, happy Thanksgiving. Hope these results will be a good celebratory for your weekend. Anyways, let's just start our summary. Revenue rose up 23% year-on-year, to MYR 795 million, predominantly due to 34% more passengers carried, and load factor remains fairly strong at 84%. Ancillary revenue surged up 40%, to about MYR 267.5 million, as ancillary revenue per pax remains pretty strong at MYR 247 per pax. CASK and CASK ex-fuel still remain lowest among peer airlines. Shows our cost-conscious airline, standing at about MYR 0.1398 and MYR 0.0657 respectively. The airline operational profitable despite soft season with net operating profit recorded to about MYR 3 million. Profitable for the nine consecutive quarters since relaunch of operations.
Net profit stood at about MYR 121.6 due to the net foreign exchange gains on the back of appreciation of the Malaysian Ringgit. Just to our associate, TAAX posted a revenue of MYR 300.7 million with average fare of MYR 613. Net profit at MYR 55 million by foreign exchange gains. Full fleet reactivation fast approaching. We are nearly there. Approaching with 17 aircraft online as of November 2024, with one more left to go, set for February 2025. And planned addition of one aircraft probably in early 2025. Positive side, which you guys all know, we secured shareholders' approval for the acquisition of Capital A Berhad’s aviation business, which is ready for the future to tap into the favorable trends in the markets. Just fundraising updates, we are still in progress as book bidding is expected after relevant approvals are secured later down the road.
Just to go into more details in terms of financial highlights. Revenue trended 23% higher year-on-year, MYR 795 million. Close to 20% increase in scheduled revenue from last year. Again, 40% growth in revenue, ancillary revenue, and direct results of continuous enhancing offering service through data-driven personalization. I think a lot of that as well is driven by sales initiative by the team, especially on the cabin crew side, selling on board. One of the biggest thing as well is pre-book. That has also improved in terms of duty-free F&B as well. The new menu keeps being updated, which is great for business as well. EBITDA normalized at to about MYR 76 million as a result of reversals of provisions of travel vouchers in 3Q 2023, establishing positive underlying operating expenses.
If you look at our numbers in terms of our operating profits versus last year, it may be down, but if you take out all the reversals from last year that we put, we are actually in a better position than we are last year. Net profit for the quarter stood at about MYR 122 million, driven by net foreign exchange gain in the Malaysian Ringgit strengthened during the quarter. Airline is profitable in net operating profit, closed at about MYR 3 million soft season. Passenger carried up 34%. Load factor to show the recovery and demand for flying 84% versus last year. Average fare dipped a little bit from last year at about 14%. As you know, as we are coming back in a stronger market last year when fares were very high in the environment.
Now, as we put more capacity and more frequency, there is a bit of dilution on the fare. I think that looks pretty quite. If you look at versus last quarter, it is pretty much as close to flat, but still remains strong from where we are. On that note also, the fares is still way higher than where it was at pre-COVID levels as well. Seats flown up 26%, which is important. Average fare, as I said earlier, mainly driven by a lot of new routes as well that we started in the quarter. Chongqing and Changsha, two Chinese markets that need a little bit of stimulation to make sure that we fill those planes through the start of those routes. RASK improved about 5% higher year-on-year, MYR 0.1543 in 3Q 2024, and driven by 17% year growth in ASK.
23% increase in total revenue, with 34% take up in the number of passengers carried. CASK at MYR 0.1398 in 3Q 2024, up around 20% year-on-year. Really, this is just really driven by the increase of number of flights, frequency, really ramping up operations. Staff expenses is really just in line with more cabin crew coming in also, and pilots, and the pay of flight allowance and block hours. Maintenance cost was also increased as that was due to higher number of C checks, and also unfortunately, the supply chain reason as well, where even some of the cost of spares has driven up due to demand and shortage of spares, and also higher user charges as we go into new markets. Reversal of travel vouchers for 3Q came, which brought forth positive other operating expenses.
The company CASK ex-fuel continued to outperform peer airlines, again, as I mentioned earlier. This little slide to show you where we are in terms our cost still remain the lowest in the market. This is due to the cost per seat spread of number of seats that we have and still remain very disciplined in terms of our cost leadership. One of the reasons also driven our lower cost as well is the high utilization. We are clocking around 14- 15 hours effectively, to ensure that our cost is low, prudent management of operating expenses despite ramped-up operations. Of course, we have further boosted with the strengthening of the Malaysian Ringgit during the quarter. Ancillary performance. This is probably one of our bread and butter as always, continued to outperform.
Ancillary revenue contributed close to 34% of total revenue at about MYR 268 on the back of a 34% year rise in number of passengers carried and boosted by diligent fine-tuning of products, services, and user experience. Ancillary revenue per pax recorded MYR 247, up by 4% driving the 40% hike in ancillary. The biggest performer for us potentially is also seat as we become more marketing in terms of making sure you can pick your seat and also upgrades that we are now offering to the passengers can also pick a seat. That is up 7%. In-flight meal really has been our success story, 23%, and that is driven by, as I said earlier, the menu and also the variety of things we have to offer on board.
Baggage has always been status quo in terms of how we price it, but I think we noticed that the demand for baggage and people and also our prudent baggage management in terms of making sure that passengers do not overcarry. People are becoming more prudent and pre-booking our baggage upfront. So that has driven to about 27% year-on-year. Just to quickly go through TAAX. Revenue up 5% to MYR 300.7 million. Net operating loss recorded at about MYR 79 million, driven by higher maintenance and overall expenses, and also the increase in staff as they ramp up operations. Net profit charted at about MYR 55 million in 3Q against a net profit of MYR 749 million in 3Q, which is mainly due to reversals as they went through their TAAX rehab plan, which we completed in September 2023.
Number of passengers carried increased marginally, and load factor was healthy at 80%, down by 2 percentage points. ASK capacities contracted slightly to 1,771 million due to sectors flown increased by 5%, surpassing the growth of 2% in seat capacity. TAAX expanded its network this quarter with the launch of Nagoya, which is the biggest success story for Japan, for Thailand, which is their fourth destination in Japan. Just to give you a bit of cover on our network plan today. I think over past COVID, we have grown from zero to 722 destinations, in November 2024. Probably the quickest recovery that we could imagine and try to ensure that planes coming online as well. Following markets that we have to make sure that we dominate China, as the group itself carries about 22 destinations to China.
We continue to build and add even further with that, with the introduction of Changsha, Medina, and also the success story of Taipei, Osaka into the network in 3Q 2024. Further extending the reach also with the recent inaugural flight of Nairobi and Chongqing, which we saw very strong encouraging load factor as well. Just to touch on China, we grew to 43 flights per week in November 2024, compared to 19 flights per week in the previous year. So that has been a massive story for us as we build. I think a lot of that, again, I said in the last results, a lot of that is driven by the visa-free regime that has been introduced between Malaysia and China. You heard recently, they have extended that even further from 15 days to 30 days, which is a massive upside as well.
Seasonal flights to Sapporo continue to do well to start in October, and that remains very strong for us in December up to Chinese New Year, where our loads are generally close to the high 90s already, which is great. AirAsia middle outlook, tapping into our current prospects just to touch again, one is to focus our network plan, focusing across the regions. As you know, we dominate in Australia, we dominate in Northeast Asia, we dominate in China. But really now is just to make sure that we are connected to new markets. As you know, we started Central Asia, and we started Africa, and we want to ensure that Kuala Lumpur remains connected to the world. Due to the recent study by someone, it was ranked the world's second most connected airport after London Heathrow. I think there's a slide on that actually.
We're also rebuilding capacity for the year of many routes, venturing to new unique markets, as I explained earlier. I think the biggest task for me and the team really was just to make sure that we have our fleet back as of last week. On Thursday, our first flight of the 17 aircraft we flew, which is great. It's been out of service for about three years, so that's good to see it coming. As I said earlier, the next one is coming out in February. To ensure that aircraft utilization is maximized to meet all the network requirements as we grow. Commercial plan is really to ensure that we became very, very nimble and very, very excited about how we grow ancillary. The team, I mean, yesterday, we had an ancillary review strategic meeting.
We have a lot of initiatives coming out for next year where we believe that even though we didn't budget it in our budget plans, there's a lot upside in terms of the new pipeline that's coming for ancillary, and I think that you can stay focused as we go through every year. The other one that we're really focused on is to ensure that we elevate Fly-Thru as AirAsia comes back into play with their aircraft being brought in from grounding and us coming in. That allows us to even have more routes and more destinations to fly and allow Fly-Thru to even increase. Back in pre-COVID, we were sitting at about 36% in terms of Fly-Thru. Now we're about 20%+ , and what we want to do is to make sure that we increase that back to that 40% levels with more frequencies and more destinations.
Proper focus area, which is really, really what we're doing as well, is to make sure that we are engaging with Capital A to progress the company's growth ambitions for the years to come. The corporate exercise that's going on. Both companies have really got their shareholders' approval. Fundraising is underway behind the scenes and to ensure that all the relevant approvals and CPs are secured and worked on as we speak. The other thing really is just the infrastructure that we've built. As it is, it's just an idea of the map that we have. We've grown our passengers, what we've built over the past 23 years. Two hubs, over 15 countries, routes from 22- 258. Unique routes to 92. 6 million and to about 19 million guests from 2019.
This really is a testament of the whole network, and we do value as we do value the group. This is really, really the strength of the business, how we've connected people across the world. Again, with new, as AirAsia show whole expansion to India and to China as well as us expanding into Central Asia and Africa, there's a lot of potential as well. I think potentially next year we're exploring a bit of routes into Europe, hopefully, and see how that goes. But I think there's a lot of potential in the routes that we even like, for example, Nairobi and Kazakhstan, it's been a success story for us, and we will continue to make sure that we find new hidden gems in terms of routes that operate. The market share, as you can see, I mean, I'm sure you see this in Capital A slides.
Market share, we remain the leader in most markets, and we shall make sure that we continue to dominate that as well. Oh, yeah. This is what I referred just now. We're the most second-connected airports after Heathrow. That just shows the strength that we have in terms of Kuala Lumpur. One, the biggest success story is to ensure that we give the opportunity for people to fly, people who's never flown before, and people to fly more frequently with AirAsia. One of the key things is being affordable and to ensure that they see the world with AirAsia. Other Southeast Asian countries, Bangkok is number 12, Singapore is number 13, Manila is number 14, and Jakarta is number 22. That shows what AirAsia has done to Kuala Lumpur.
One of the biggest story, I think, which I think Tony has also been mentioning as well, is we are connecting the dots. If you go to KLIA2, as you see at the departure board, everything's AirAsia, and you can see the destinations that we connect to. I think the key focus for us is to make sure that we are the next Dubai, but low cost style, and making sure that we are multi-hub connectivity. Two biggest for us, number one is to connect through Kuala Lumpur and Bangkok, and then we will connect her to Eastern Europe via Europe one day. Philippines as well is a goal that we're looking at as well through the short-haul and probably having a long-haul aircraft in there, in Vietnam and also growing Senai and Phuket as a hub into secondary hubs moving forward.
I think the key thing for us as well is just to sum up the 3 Q is it's been a very, very good year for us. As I clearly said, nine quarters of profitability. As you see the cost as it is, in terms of MRO, the positive side is looking forward to what's there is ADE as well, secured 330 certificate where they were able to service 330 aircrafts. I think the team is putting a lot of our aircraft into ADE next year, and that potentially will save costs in terms of pricing, in terms of traveling into all the other MROs. ADE as well, with the competitive pricing in terms of local labor. You can see that that will drive costs down as well.
With Asia Digital Engineering having 16 lines, they can fit in about two wide bodies, that is just a positive upside. For us, we have 13 C checks for next year, we want to make sure that we try to reduce as much cost as we can and work with them as well. Number two as well is to ride on MOVE Digital, our airasia.com portal. As they grow in becoming the number one OTA in the region, we are riding to make sure that AirAsia X and also AirAsia Group remains fairly strong and very visible in that web, to ensure access to, even whether it is through AirAsia flights or through other flights that have those airlines. That is something that is very positive with us.
But yeah, this, I would imagine, probably be the two, and the third is potentially ancillary, which I believe is a big growth for us, to make sure that adds revenue to us as a business moving forward. Four is looking forward into fourth quarter. As you know, it is probably one of our strongest fourth quarter, usually throughout the year. Loads remain fairly strong. Most of the markets that we see now towards year-end, flights are generally coming up to about the high 80s already. Routes that are fairly strong for us, that does really well in December, January, and February is Australia, Japan, Korea, India. Kazakhstan remains, well, a surprise for us, also hitting in the high 90s for the winter.
Nairobi, which is a surprise route for us, since November, has been picking up quite fast, hitting about close to the high 70s as we speak now, which is great. So I think a lot of potential. While also on top of that, we support some of the short-haul routes as well, as they have shorter capacity, and we support through KK, Kuching, and also Bali as well, in terms of the wide-body operation to utilize our three day time slots that we have while some of the aircraft are still on the ground with that. On that note, everybody, I think thank you very much for all your support. It has been a great year as we move into fourth quarter.
I hope we shall now open up for questions and we will see how, and I will try to address as much as we can as we move forward. Thanks, everybody.
Hi, everyone. Moving on to Q&A session. You can either raise your hand and unmute and speak, or you could put your question in the chat box. Xiang Ting, I see you have your hand raised. Would you like to unmute and speak? Oh, no more hand raised. Hi, Matthew.
Yeah. Hi. Thank you for the call. I just want to ask, what's the updated timeline for the AAX warrant and also what's the update on the pipe placement? I believe the earlier timeline presented in the EGM was November or December for the AAX warrants.
Yeah. That's something that's still on the target. There are few other things that we're still finalizing in terms of the CPs and all that. That's the target plan at the moment. But we will give further update as we go on. We're trying as hard as we can, trying to complete by December, but if we can't, we may just move into January or so. That's the target for us.
I see. All right. Thank you. Just turn back the Yeah.
What are the CPs pending? There is a lot of CPs going around. We have to make sure there is a lot of CPs that related to Capital A that we have to meet as well. It is a long list, but we are nearly there. Of course, the placement as well is being worked on. I think that is probably about halfway as we speak. As I spoke earlier, I think that is something that we are trying to complete as fast as we can. But if you are asking if there is any hurdles, I do not think so.
Hi, Sam. You can unmute and speak.
Thanks, Jane. Hi, everyone. Just a couple of questions from me. Number one, your EBITDA has gone up substantially past the MYR 300 million mark. So in the fourth quarter, should we assume that there will be a provision for the EBITDA sharing arrangement that you have with the creditors? That is one. Then number two, how do you see fares going into the fourth quarter? Because first quarter started out really strong. Second and third started normalized in tandem with seasonality. I was wondering what the fourth quarter is looking like so far. Thanks.
Yeah. As I said earlier, I think in terms of our forecast going forward, even now, I think we are kind of on target. Third quarter, I think we had a slight bump in terms of, I think there were some fare reduces as well, but I am quite happy in terms of where we are sitting now. 341, as you said, yes. Fourth quarter looks fairly strong. May exceed your last year's one. May, I think I am just being conservative, but I think we will. Because a lot of it, I think I would say 40% usually of our contribution of the full year comes from fourth quarter. So I think that is something that has a lot of upside there as well. Your second question, you are asking about what? Fare, right?
The EBITDA share arrangement with the
Sorry?
The profit sharing.
Yeah. If we exceed that, we have to share the MYR 300 million. If it exceeds above MYR 300 million, we have to start profit share.
Right. So you haven't accounted for that yet in the fourth quarter
Yeah
Judging from the momentum so far.
Yeah.
You have for the whole year. You have for the first three quarters already.
Sorry, can you repeat? What do you mean?
You are asking if we have made provision on the books for this profit sharing, is it?
Yeah, that is right. Yes.
Yes, we have.
All right. The fourth quarter bit is routine, right? All right. Okay, understand.
Yeah.
Right. Going back to fares for the whole year, for the fourth quarter, where do you think you will land, if I can. You can humor me about that.
No, I think, I know these are very every quarter questions for you, but I am quite, in terms of where we are in terms of fourth quarter, we are fairly strong to where we are pre-COVID. That is quite clear. I think, I do not want to oversell as well, but I think just looking at where we are in December looks fairly strong, especially in Australia, Japan. We are already on those markets, already hitting at about 90% low factor. In terms of the tier bucket, in terms of the fare, we are already at the high end of the tier buckets as well in terms of the fare moving out. So I am quite confident. I think the only things that we need to push is maybe China.
China is the total opposite of all the other markets that we operate, as they come off Golden Week inter quarter, which did well for us in this quarter. It goes down slow in December. So you will see that we will potentially lower our fares for China to stimulate load. But in general, if you look at holistically as a whole fare, the whole group sector, it looks really strong, and I think that can probably be aligned with where we were last year as well.
Right. Okay. Sure. Let me look at the last year. Okay. Just one last so-called fun question for me. MAS is getting a new A330 very soon. When are you going to get yours?
No, MAS, you got to realize there is two different kettles, right? So MAS, they have a lot of A330-200s. Very inefficient. So, they cannot go far. And those are older aircraft. They are close to about 18 years, 17-year aircrafts. So, they need to replace that first and get that out. For us, we have all the new generation A330-300s. So our average age of our fleet is about 8.5 years to nine. So we are fairly young. I think our oldest aircraft is only about 14 years. Or 14- 15, and that is only on the low side. So a bit different. We cannot compare it that way unless they have more A330-300s. And also they have shorter capacity as well, moving out. So, for us, the 330s, it is something that we have put back a little bit.
We are happy because at the moment, the load rates of the A330-300s are We're enjoying it, the restructuring era. We're still playing way below market, which is great. We want to make sure that we enjoy it as much as we can. But I think as Tony said as well in the calls is, we want to make sure that we try to find as many narrow bodies into AirAsia as well. I think with the XLR, potentially the A321XLR, we're trying to take advantage of that to grow the market and see, and fly into some of the destinations where 330, wide body is a bit too much. That will enhance yield and also lower the cost structure for the business as well.
At the moment, in the next two years, it's just get the score as we can, and we'll just see what's in the market for A330-300s.
Hi, I'm Hazmi.
Hi. Thanks. Yeah.
Hi, how-
Hi, sorry. Can I. Sorry, Hazmi, can we proceed with Shahril first? I think he raised his hand first.
Oh, okay. Sorry. I raised my hand.
Thank you so much. So sorry. Hi, Shahril. Please proceed with your question.
Hi. Thank you, AirAsia team. Good evening. I think a few questions for me. The first one is on the slide. I think it is on page.
You talk very fast, Shahril. Can you speak close to your laptop?
Okay. Is it better now?
Yeah.
All right, great. Okay. The first question is on slide number six. There is a reversal of provision for travel vouchers in the third quarter last year.
Yeah.
May I know how much is it?
MYR 400 million, right? Can you just repeat the second?
There were a few reversals that were done in Q3 2023, mainly, the provision for tax in IAAX, which was around MYR 70 million, and MYR 40 million was relating to travel vouchers. It is MYR 109 million that was done in 2023.
All right. MYR 109 million. Okay.
Yes.
Speaking of Thai AirAsia, what is your expectation on Thai AirAsia specifically? When would it start recognizing profits? Do you have any expectation on that?
Yeah. I think looking at the trends, I think we are targeting next year, probably towards the second half of next year. I think as they have been hyper quite a bit this year in terms of bringing aircraft back into the system. I think next year they are targeting for another two or three aircraft being back operational. If they go at the trends, their market is a bit different than us because the demand for Thailand for tourists is much higher than us. You can see their loads is very high. I think just internally, we think by second half next year, we will see something. I cannot tell you whether it is third or fourth. Let us see. If they do well in the first and second, it may be earlier.
I see. Okay. But then for the third quarter this year, their results, their performance is actually they made an operating loss, right? This is mainly due to
Yeah. A lot of that is driven by market actually. I think the Korean market has hampered them quite a bit, because of immigration issues for Thais going there. Because I understand from just recently that there has been a lot of MTLs that are going into Korea. I think that has been impacting them quite a bit. But generally, I think it is a good year for them, and the utilization of their aircraft as well has been quite low. I think moving into fourth December, I think increased some of the frequencies into Osaka, Narita, you see that it will come back very strong.
I see. Okay. Are you expecting to have a higher load factor or passengers carried next year? Do you have some sort of guidance?
In terms of Thailand or just Malaysia?
Yeah.
In terms of D7 or in terms of AAX?
D7.
Their forecast load factor is very high. I won't be surprised that they will hit it. Historically, as you can see, their load factors are always in the high 80s, easily. I'm quite confident that they will hit that.
I see. Okay. All right. My next question would be on the profit-sharing agreement. You said you have made provision this year. How much have you made so far?
We have made provision from 2023 already on the balance sheet based on the expected sharing over the next few years. We have put aside of around MYR 30 million.
This MYR 30 million was provided for back in 2023?
Correct.
Have not been reversed out or anything as such, right?
That is right.
Okay. Do you expect any further provision for this one?
We will assess it again at year-end together with our auditors.
I see. All right. Okay, my last one on the CPs. For CPs for AirAsia X, can the deal actually go through? When I say the deal, I am talking about private placement, warrants, et cetera. Can it actually go through if, say, for example, Capital A cannot get the High Court approval on time?
No, High Court, I think is separate. But in terms of placement, that's a CP. So prior to the deal being completed, if there's no private placement, there's no deal. There's also a lot of novations of guarantees that are raised as well that we're working on. So that already is in progress. Some has come through, some still in the final documentation stage. And the others are all just like MAVCOM, we got approval already. Some of the Bank Negara stuff, we got approval already. So that's generally just all in the process. It's painstaking, but we're getting there.
I see. So the High Court approval is separate from the private placement and the warrants, is that correct?
Correct.
Hazmi, sorry for interrupting just now. I think, please unmute and let us know of your questions.
Okay. So, I just want to ask one simple question. What is your expectation, this low-cost aircraft airline business evolve in the next 5- 10 years?
Can you repeat that question again?
How do you vision this low-cost aircraft business model will evolve in the next 5- 10 years?
Well, I think that's a very big. I can spend five hours and write a paper to you and have a chat. But just generally, I think, just to let you know, we just turned 17 years, early November. AirAsia Berhad is turning 23 in a week. So we're still here, and we've become from a two-aircraft operator, becoming now close to about 200 aircraft. So you can see how we've grown. We've become the biggest low-cost carrier in this region, close to the largest. We have wide body, narrow bodies. We have different entities in different countries. Similar Thailand, Indonesia, Philippines, Cambodia. We've also created all other peripherals of businesses that we have. There's MOVE Digital, there's ADE, there's Teleport. Really, we've grown so big. Just to highlight as well is we came through COVID with no support of the government.
We turned it around, and we're back again at where we are pre-COVID. So your question is, where we'll be in the 5- 10 years? I think we'll be better and stronger. We'll be very lean. I think we want to make sure, as I said in the flights, that we'll be the number one, and we'll try to be the number one and be the Dubai of the world and make sure that we connect the world. Whether it's through Kuala Lumpur, whether it's through Thailand, whether it's through Indonesia, whether it's through Philippines, and make sure that we connect everywhere as it is. So I'm quite optimistic that we will grow that and ensure that we dominate in all regions that we can. So, the ecosystem is already set for us. As I said, everything is there.
We got our own ground handling, our own MRO, we got our own big data, we got our own online OTA. Everything in the ecosystem, our own cargo is there. I think, the only story that we can tell is up. I hope that helps you in the summary.
No, my question is just that, how do you see your industry will evolve? Not just AirAsia, but a low-class area, as a whole in general, will evolve in the next five years.
Have you flown AirAsia before?
Yeah. I've flown with AirAsia before, but-
Do you think that we are low-class? Are we low-class?
No, I am sorry to use that word. Low cost, sorry.
Okay.
Yeah.
You just made me sound a bit we are low-class.
No, I am sorry about it. It is just that
Okay
Because I read somewhere, they said that low-cost carrier business is not evolving fast enough for the growth to be sustainable for investor for the next 5- 10 years.
All right. Yeah. No, I think you see where we are now. If you see us as a group, there is a lot of lessors, a lot of financers wanting to work with us. They believe in the story. And I see you see on the Capital A side, the funding they have been getting as well has been very positive and the support in terms of everybody else that we get. So I think in terms of sustainability for the low cost, it is there. The only way you could think that you are right, that our low cost or low class that you say we are
I am sorry about that
Our load factor wouldn't be 90%.
I'm so sorry.
I think that's very important. I think the fact that we are 90%, just to let you know also, of the 90% load factor that we operate, 30% of those people are people that's never flown an airplane before. They are the first time. We are there to stimulate new market. We are also stimulating people that, for example, if you want to go to London or go to people will save five years to go there, or four years. For the middle-income people, not bankers and all that, but people who cannot afford to go, they will now go five times a year or four times a year. Singapore last time used to cost MYR 1,005 to go. Now you can go for MYR 200. We get people go every weekend. What I'm trying to say is, we're here to make sure that flying is affordable.
We are making sure that you can choose your option to fly. You can fly with your bags and still fly very cheap and everything else. In terms of sustainability, in terms of investments, we've been here. We've done a lot of private placements in the past. A lot of support. We raised money as well. Last year, MYR 50 million, two big investors came in, supported us because they believe in the business. You've seen our share price. During COVID, it was only MYR 0.20, and now we're hitting about, in the high last week at about MYR 2.30.
Yes
To answer your question, they do believe in the business. But as I said, it takes time for us to come back. So there is a lot of things that is happening now, the corporate side as we speak, lot upside, and I think, I am very bullish in where we are going to head in the future.
Yeah. Okay. Thanks.
Thank you, Hazmi. Okay, Seang, please unmute and share with us your questions.
Hello, can you hear me?
Can. Very clear.
Yes. This question is, can you help us to reconcile what happened to the jet fuel price? Because this quarter, the jet fuel price is about $101, right? Last quarter is about $104. So it's only dropped like $3. But looking at the oil price, actually, it should be dropping more, right? Can you help us to understand this?
Can you repeat the question again? I didn't quite get you.
Yeah.
Okay. Can you hear me clearly now?
Yeah. Because you keep cutting off, so I just want to capture it and see if you get it.
Okay. Better now?
No, you're cutting off.
Okay. Still cutting off.
Yeah.
No matter.
Can you stay close to your laptop?
Yeah, I am actually using my earphone, but it is okay. I will type out the questions.
Okay. You can answer another question. Can you type it in, if you can, and I will try and answer that.
Okay.
Sorry. What do you mean by drop your expectation? What is your expectation again? Sorry. This is based on our market price, Seang.
Yeah, I understand it is based on market price, but when you look at the global terminal prices, it actually dropped more, right?
Yeah.
Can you explain to me why is it the case?
Let me get back to you. You get back to us. How about you send us the data? Because what we do and how we disclose this is based on-
Market price
Average price and market price. Show it to us, and then we'll see how it compares to us, because I don't think that it's actual cost.
It's actual cost.
It's actual cost. We don't play around with that, Jeff.
Yeah.
Yeah.
Hi, Gerald. I saw your question in the chat box. Could we just check what is it that you mean by Protocol five?
Oh, ASEAN Single Aviation Market. We do not fly to ASEAN countries. I think it is good for AirAsia, where you can fly from capital city to capital city basis, Kuala Lumpur, Singapore, Jakarta. It is a positive upside. For me, I only fly to Denpasar, and that is it, really. It does not really benefit me.
Hi, Matthew.
Just a question on the CASK ex-fuel and the RASK. Could you give us some color as to why did the costs rose higher year-on-year as compared to RASK?
No, I think the answer to this is basically, I think the last quarter, actually, to be honest, this year, we started a lot of new routes, new destinations. As I said earlier, a lot of the operations costs in terms of ground handling, user charges, manpower has gone up in the fast listing. Plus, to take note, we did not have manpower for our new aircraft that were coming in. So we needed to make sure that they come in. Obviously, as you see now, our utilization is up 15 hours. The crew hours also has been increasing, so we have to pay more allowances to the crew. Generally, it is just in line with very fast growth. While revenue as it is also, is growing as well, but the cost in terms of making sure that we go into markets is growing faster than usual.
But I think, next year, as we go into 2025, you will see that the cost growth will not grow as much as you can. The only one that is going to grow in that is probably, I do not know where the market is going to go, but variable in terms of the fuel, and currency. Other than that, I do not think that will grow as much because there are not many or only one or two new destinations as we are. So it will be very, very flat or even lower, potentially.
All right. Another question is on the MRO cost. I believe the third quarter is MYR 155 million, which is like a 30% increase Q o Q. Is it related to the reactivation of the 17 and 18 fleet?
Yes, and also C checks. We fly more as well, as you pay for the engine hours and all that kind of stuff. So, yeah. A lot of that is the C checks that we have. Unfortunately, this year, next year, we have a lot of C checks coming in as the aircraft come back into service. So, next year, as I said earlier, you will see the MRO cost also quite high because there are 13 C checks that is due for next year.
I see. Can we expect the MYR 155 million to be the average amount per quarter going into next year? Or should it come off?
No. I think for December, I do not know whether we were going to provide, but I think it will be lower in the fourth because there are not many aircraft going in for C checks. Next year, I think every quarter you will see, I think it will pick up in second quarter next year as more aircraft are going in for their C checks.
All right. Lastly, could you help us break down what is the other operating costs or expenses that was incurred this year? Because I think it is MYR 33 million, right?
Yeah. Basically, a lot of it is, as we started new routes, we have been advertising a lot in terms of publicity, promotions, and all that. It is about MYR 8 million higher than the previous quarter. As we have tried to promote Kazakhstan moving forward, we started early in Nairobi as well, with Chongqing. That is a lot we have been doing. Secondly, as well, hiring all these bankers and corporate exercises is not cheap. Lawyers and all this. That also has been increased, our corporate exercise, the cost in terms of what this year versus last year. Also, there is also some small reversal of activation fees and also travel vouchers, unutilized travel vouchers that we reversed back as well.
In the prior year.
In the prior year. Yeah.
Can you share, what are the one-offs from this quarter that we would not see in the coming quarters or next year?
Promotional and publicity and advertising expenses. That should not be at that level.
What would be the normalized level?
It will probably go back down to around MYR 20 million.
Okay. All right. Thank you.
Yeah, good. I'm just trying to go through the chat box. So many. Where are we? I can't share much about the placement. I think, at the moment, we're all in the high-level discussions at the moment, so I can't disclose where we are. I think in terms of where we feedbacks that we're getting, it's been very positive. Okay. Thanks.
It's under snow coverage.
I already covered Protocol five. Could it take away some business from you in terms of protocol? I don't think so. As I said, no impact because a lot of our point of destinations, a lot of the dominant people that are flying on AirAsia are mainly from Kuala Lumpur. I would say about 60% of our market is Malaysian-driven, while 40% is international. Australia, China, Japan, India, Kazakhstan, all that is 40%. I don't see that impacting because they are not in the ASEAN region, so I don't see that as an impact for us. Regarding our unrealized Forex gain, what is mainly related, that's in terms of the lease?
Unrealized.
Yeah, unrealized. That's basically, as you know, we pay our leases in US dollars. Can you confirm again? I just heard Ben said that 13-10 is going to C checks. Yes, this is all AX claims. I mean, we're only talking about AX, right? Yeah, all AX. Good. Yeah. USD fell in 3Q, but fuel costs in the ringgit didn't fall. Shouldn't it?
We utilized more barrels.
Yeah. As you know, we fly more barrels. We fly more flights, so therefore, more barrels we consume. Inherently, the cost will increase.
Increase by 20%.
Well, David, some C checks are three weeks, some C checks are two months. It varies. So it depends on the severity. There are your big checks and the 12-year checks, which are usually about two and a half months. Your C8 is around three weeks. Your C6 is about a month. Your C10 is about two weeks. So it varies. This I can go on forever.
No, not for now. No, not for now.
Any more questions, guys? Okay. Any questions, guys, can you just revert to Jane and all that? Thanks for your support and everything else. I think as I want to address, I think the key thing is I think we are in a very good position. As we move to the next five, 10 years, we will be the number one low-cost carrier to make sure that we dominate the market. I think that we are very upside. As I said, the ecosystem for AirAsia and AirAsia Group is fixed. There is a lot of upside. I believe that this is a good success story. Third quarter is, internally, I think it has been a good quarter for us. Nine quarters profitability, and as we move into fourth, that we will end with a bang. Again, thanks for your support.
Hopefully, I will update you with anything in terms of placement or where we are in the corporate exercises. I think we are very transparent on that. We will let you know when it gets closer, whether it is December or January as we get closer. Again, thanks for everybody, you guys, for coming on your Fridays. We will catch up. Okay. Thank you.