Decline In Crude Oil Prices Is Good News For AirAsia's Profitability - AirAsia CEO

KUALA LUMPUR, May 18 (Bernama) -- The decline in crude oil prices is good news for AirAsia Bhd as it can increase profitability of the low-cost carrier, its Chief Executive Officer Tony Fernandes said on Friday. Through his Twitter account, he even hinted on further low fares. "Oil going down. Good news for AirAsia profitability. At our end, the market demand is very very good, also means lower fares," he said. OSK Research recently said that it was bullish on AirAsia's profitability as demand for low-cost travel continued to be good, load factor is holding up while earnings from AirAsia's Thai operations would mitigate the rise in jet fuel prices. Crude oil prices slipped below US$107 a barrel Friday, the lowest this year amid rising concerns over further uncertainties in the European economies. In March, the International Air Transport Association (IATA) has announced a downgrade to its industry outlook for this year, cutting global profit to US$3 billion from US$3.5 billion estimated before due to rising oil prices. On the local front, AirAsia and national carrier, Malaysia Airlines, have signed a supplemental collaboration agreement to explore areas of mutual need to realise savings and boost efficiency following cancellation of the share-swap deal. -- BERNAMA