AirAsia recorded a 26.01 revenue growth from RM3,133 million in 2009 to RM3,948 million in 2010. The revenue growth in 2010 was boosted by an increasing number of guests, as reflected in their passenger load. In 2010, AirAsia Group's totalled passenger load has increased to 78% from 75% in 2009, or to 25.68 million passengers from 22.70 million passengers. This may resulted from AirAsia's free ticket campaign in 2010, they achieved sales of 538,000 tickets on the first day of the campaign compared to 390,000 bookings in 2009. In year 2010, AirAsia's ticket sales has increased to RM2.83 billion which make up 72% of AirAsia's total revenue.
Besides that, AirAsia's revenue in 2010 was also derived by increased of ancillary income to RM1.1 billion. In 2010, AirAsia managed to increase the average ancillary income per passenger to RM44 by enhanced product offering such as excess baggage. Growth in ancillary income was also derived from cargo and courier services which increased from RM 79.79 million in 2009 to RM121.35 million in 2010. Moreover, aircraft operating lease income also increased to RM396 million in 2010 compared to RM320 million in 2009.
2010-2011
In 2011, the revenue growth has decreased to 13.86%. Decreased in revenue growth may be result from a reduction in selling price or sales and promotion discount. For example, AirAsia offered promotional tickets from RM 3 low fare in July 2011. However, the group's totalled passenger load has risen to 29.86 million guests in 2011 from 25.68 million guests in 2010. In year 2011, ticket sales have increased to RM3.06 billion which make up 68% of AirAsia's total revenue.
In 2011, ancillary income became a main contributor to group's revenue due to the rise in fuel prices. AirAsia's ancillary income per passenger has increased to RM45 per passenger in 2011. Growth in ancillary income was boosted from baggage fees, which saw an increase of 25% compared to 2010. Pick-A-Seat service and Inflight meals also increased by 81% and 33% respectively. Moreover, food and beverage with higher order rates in 2011 due to more variety on the in-flight menu.
Figure 1.2: Return on Capital Employed
Source: AirAsia Annual Report (2009,2010 & 2011)
2009-2010
The return on capital employed has increased from 9.63% in 2009 to 10.68% in 2010. This resulted from the increased of the profit before interest and tax. Despite the increase in oil price to averaged us$91.8 per barrel in 2010, the profit of AirAsia has risen from RM913 million in 2009 to RM1067 million in 2010, an increase of 14.9%. And they had grown their fleet from 84 to 90 aircraft.
2010-2011
The return on capital employed has increased to 11.97% in 2011. In 2011, the price of oil was increased by 36%. In order to address this issue, AirAsia was controlling costs and increasing productivity that enabled them to sustain a high profit before interest and tax. The ex-fuel CASK dropped by 13% to 6.00 sen. Besides that, the increase in return on capital employed also resulted from using single type of aircraft, Airbus A320 to minimize maintenance fee and pilot training costs. Therefore, the maintenance cost has decreased by RM6 million in 2011.
Figure 1.3: Gearing
Source: AirAsia Annual Report (2009,2010 & 2011)
2009-2010
The gearing percentage has fallen to 68.33% in 2010 from 74.38% in 2009. The decreased in gearing percentage was due to increased of shareholder's equity from RM2,621 million to RM3,641 million in 2010, which resulted from issue new shares. During the financial year 2010, the company increased its issued and paid-up ordinary share capital from rm275,774,458 to rm277,343,608 by way of issuance of 15,691,500 ordinary shares of rm0.10 each. Also, the decreased in gearing percentage in 2010 resulted from increased in retained earnings in 2010, which is an increase of 84.7% in retained earnings.
2010-2011
The gearing percentage as at 31 December 2011 has fallen to 65.85% from 68.33% in 2010. This was due to innovative financing which they have secured for aircraft deliveries up to 2013.The group also reduced borrowings by RM76 million compared to 2010. The long term loans has decreased by RM530 million and the Commodity Murabaha Finance has decreased by RM9 million. Besides that, it was also because the group has increased its shareholder's equity to RM4,036 million in 2011. The group has increased its issued and paid-up ordinary share capital from from RM277,343,608 to RM277,808,558 by way of issuance of 4,649,500 ordinary shares of RM0.10 each. Moreover, the retained earnings also increased by 22.8% in 2011.
Graph 1.4: Current Ratio
Source: AirAsia Annual Report (2009,2010 & 2011)
2009 - 2010
The current ratio has increased from 1.3 in 2009 to 1.56 in 2010. The increased in current ratio in 2010 resulted from the increased of current assets by RM653 million. The increased of current asset was achieved by increased of cash balance by RM758 million in 2010 including deposits on aircraft purchases, total cash is about RM1.8 billion. The cash equivalents have increased due to increased of deposit with licensed banks to RM 719 million in 2010.
2010-2011
The current ratio has increased in 2011 to 1.73 from 1.56 in 2010. The increased in current ratio in 2011 due to increase in current assets by RM920 million compared to 2011. The main factor that affected the high increase in current assets was cash and cash equivalents, which increased by RM600 million in 2011. The total cash was about RM2.4 billion including deposits on aircraft purchases. The cash equivalents have resulted from increased of cash and bank balances to RM1.3 billion.
Figure 1.5 : Interest Cover
Source: AirAsia Annual Report (2009,2010 & 2011)
2009-2010
In 2009, group's interest is covered by 3.15 times by the profit whereas interest is covered by 3.27 times by the profit in 2010, an increase of 0.12 times in 2010. This was due to increase profit to RM1,067 million in 2010. Besides that, the group's borrowings were managed by using derivative financial instruments to maintain the desired fixed interest rate.
2010-2011
In 2011, the interest cover ratio has increased to 3.73 times. This resulted from the increased profit to RM1,163 million coupled with decreased net finance payment by RM5 million in 2010. The interest expenses on bank borrowing have decreased by RM5 million in 2010 resulted in decreased of net finance payments. This has been due to reduce of borrowings of term loans and Commodity Murabaha Finance. Moreover, AirAsia has entered into interest rate swap contracts to convert existing floating rate into fixed rate. This enabled group to pay fixed interest expense.
Figure 1.6: Asset Turnover
Source: AirAsia Annual Report (2009,2010 & 2011)
2009-2010
In 2010, the asset turnover has risen slightly from 0.32 times in 2009 to 0.35 times, an increase of 0.03 times. This indicated that AirAsia was able to generate revenue of RM0.35 for every RM1 of assets in 2010. The increased of turnover was due to increase amount of revenue to RM3,948 million in 2010.
2010-2011
In 2011, the asset turnover has increased to 0.38 times, an increase of 0.03 times. This indicated that AirAsia was able to generate revenue of RM0.38 for every RM1 of assets in 2010. The increased of turnover was due to grow of revenue to RM4,495 million and decrease investment in non-current assets by RM 254 million. The decreased in non-current assets was significantly affected by property, plant and equipment investments, which dropped from RM9.3 billion in 2010 to RM8.6 billion in 2011. Disposal of aircraft engines, airframe and service potential and depreciation charge amounted to RM 1.35 billion and RM521 million respectively.
Although ratio analysis is a helpful tool for analyzing the financial statements of the group, however use of ratio analysis has certain limitations.
