(Corrects Fernandes' position in third paragraph)
KUALA LUMPUR May 21 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)