(Corrects Fernandes' position in third paragraph)
KUALA LUMPUR, May 21 (Reuters) - Shares of AirAsia Bhd rose as much as 5.2 percent on Wednesday on anticipation of improving yields as well as better prospects for a potential share buyback programme by Asia's biggest budget airline by passenger numbers.
The group on Tuesday reported first-quarter profit rose 33 percent due to improved passenger numbers, foreign exchange gains and deferred taxes.
Group Chief Executive Officer Tony Fernandes said that AirAsia will defer deliveries of a number of its aircraft that will result in a net gain of about 550 million ringgit ($170.78 million), as the carrier looks to ease concerns of overcapacity.
"This would raise a larger-than-expected amount of cash, which could be used for their share buyback programme, and at least provide support to their share prices," said AllianceDBS Research analyst Tan Kee Hoong.
AirAsia's ancillary income per passenger - income other than from ticket sales such as luggage fees and food - rose 7 percent, while yields advanced 1.4 percent on quarter.
"You can roughly see the yield compression for AirAsia has largely bottomed out," added Tan.
"With the removal of the yield concerns, second-half earnings will definitely be better than the first half. I think the market is speeding up the stock based on these reasons."
AirAsia shares were 3.4 percent higher at 2.41 ringgit ($0.75) as of 0414 GMT after climbing to 2.45 ringgit, outperforming the Malaysian benchmark stock index that fell 0.17 percent. ($1 = 3.2205 Malaysian Ringgit) (Reporting By Anuradha Raghu; Editing by Subhranshu Sahu)