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AirAsia reports drop in profit

AirAsia has reported a sharp fall in fourth quarter net profit, as the flamboyant boss of Asia's largest budget carrier by capacity called for "creative" ways to slash costs amid stiff competition.

KUALA LUMPUR: AirAsia on Wednesday reported a sharp fall in fourth quarter net profit, as the flamboyant boss of Asia's largest budget carrier by capacity called for "creative" ways to slash costs amid stiff competition.

Net profit for the three months ended December fell 19 per cent from a year earlier to 245 million ringgit ($74.6 million), in large part due to Malaysian currency fluctuations, while revenue remained flat at 1.35 billion ringgit.

For the full year, profit fell 55 per cent to 364 million ringgit compared to a year earlier.

AirAsia's 2013 results follow a highly profitable 2012, when the carrier -- growing from a struggling two-plane operation, which Fernandes bought in 2001 -- recorded a 238 percent jump in net profit despite high fuel prices.

AirAsia boss Tony Fernandes said the carrier would continue to focus on slashing costs by selling older aircraft and reducing staff, among other measures.

"The company needs to continue to be creative in driving margins up," Fernandes said in a statement.

"We have deferred seven aircrafts in 2014 and 12 in 2015 to later years with intention to swap those aircraft with the new fuel efficient A320 neo," he said.

Operating profit for the fourth quarter declined two percent to 315 million ringgit due to higher aircraft maintenance costs and lower fares, AirAsia said.

Fierce rival Malaysia Airlines announced last week its fourth straight quarterly loss in the last three months of 2013, accumulating a whopping 1.17 billion ringgit loss for the full year.

The airline, which now has more than 120 A320s and is one of the biggest customers for the European aircraft maker Airbus, is expecting nearly 360 new aircraft to be delivered up to 2026.

It has also set up subsidiary budget carriers in Indonesia, the Philippines and Thailand and plans to launch a no-frills joint venture in India.

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