KUALA LUMPUR: AIRASIA BHD []’s net profit fell 23.2% to RM171.93 million for the first quarter ended March 31, 2011 from RM224.11 million a year ago as it was affected by rising operational costs.

It said on Tuesday, May 24 that revenue rose 20.3% to RM1.048 billion from RM870.60 million while earnings per share slipped to 6.2 sen from 9.1 sen.

The low-cost carrier said staff costs increased to RM118.53 million from RM90.43 million while aircraft fuel expenses rose to RM376.54 million from RM308.83 million. It also said the maintenance, overhaul, user charges and other related expenses increased to RM146.73 million from RM110.63 million.

Revenue growth was supported by 17% growth in passenger volume offset by an average fare that was 5% lower at RM164 as compared to RM173 achieved in 1Q10.

Ancillary income per passenger year-on-year rose by 31% to RM50 from RM38. Seat load factor was 6 percentage points higher at 80% compared to 74% a year ago.

The group’s total debt as of end March 31, 2011 was RM7.77 billion. The group’s net debt after offsetting the cash balances amounted to RM5.97 billion. This translated to a net gearing ratio of 1.57 times, 10% lower than the 4Q2010.

“The outlook for the second quarter and beyond should be seen in the context of the recent volatility in the price of oil and aviation fuel.

“To mitigate the impact of higher fuel prices AirAsia introduced a fuel surcharge with effect May 3, 2011 and the company will continue to closely monitor fuel price movements. The introduction of a fuel surcharge is expected to significantly offset any effect of higher fuel prices in the second half of the year, but in the second quarter it is not expected to fully offset higher fuel costs,” it said.

AirAsia said based on the current forward booking trend, the underlying passenger demand in the second quarter for the Malaysian, Thai and Indonesian operations remains positive.

“Load factors achieved in the month of April were ahead of the prior year for all three carriers, with average fares higher in Thailand and Indonesia and slightly behind the prior year for the Malaysian operations,” it said.

AirAsia said said in Malaysia, forward loads for the remaining months of the second quarter and beyond remain ahead of the prior year, indicating that demand remains strong.

“Passenger numbers are expected to continue increasing ahead of capacity growth, while new sources of ancillary income will maintain yields in combination with improved load factors,” it said.