AirAsia X Berhad (AAX) Earnings Call Transcript & Summary

Everyone. Thank you for joining us today for the AirAsia X Berhad Third Quarter Financial Results. In the room, we have CEO, Ben, who will be sharing about the results with all of you. Over to you, Ben.

Hi, everybody. Good evening. Welcome to our third quarter results. Just want to wish you guys, we have celebrated Happy Thanksgiving. So I hope you -- these results will be a good celebratory for your weekend. So anyways, let's just start our summary. Revenue rose up to 23% year-on-year to MYR 795 million, predominantly due to 34% more passengers carried and load factor remains fairly strong at 84%. Delivery revenue surged up 40% to about MYR 267.5 million as ancillary revenue per pax remains pretty strong at MYR 247 per pax. CASK and CASK ex-fuel still remain the lowest among peer airlines, shows cost-conscious airline, standing at about MYR 0.1398 and MYR 0.0657, respectively. The airline operational profitable despite soft season with net operating profit recorded to about MYR 3 million, profitable for the 9 consecutive quarters since relaunch of operations. Net profit stood at about MYR 121.6 million due to the net foreign exchange gains on the back of appreciation of the Malaysian Ringgit. Just to our associate, TAAX posted a revenue of MYR 300.7 million with an average fare of MYR 613, net profit at MYR 55 million buoyed by foreign exchange gains. Full fleet reactivation fast approaching. We're nearly there, approaching with 17 aircraft online as of November 2024, with one more left to go set for February 2025 and planned addition of 1 aircraft probably in early 2025. Positive side, which you guys all know, we secured shareholders' approval for the acquisition of Capital A Berhad's aviation business, which is ready for the future to tap into the favorable trends in the markets. And just fundraising updates, we're still in progress as bidding is expected after relevant approvals are secured later down the road. Just to go into more details in terms of financial highlights. Revenue trended 23% higher year-on-year, MYR 795 million, close to 20% increase in scheduled revenue from last year. Again, 40% growth in revenue, ancillary revenue and direct results of continuous enhancing offering service through data-driven personalization. I think a lot of that as well is driven by sales initiative by the team, especially on the cabin crew side selling on board. And one of the biggest thing as well is prebook has also improved in terms of duty-free F&B as well. And the new menu keeps being updating, which is great for business as well. EBITDA normalized to about MYR 76 million as a result of reversals of provisions of travel vouchers in 3Q '23, starting positive other than operating expenses. If you look at our numbers in terms of our operating profits versus last year, it may be down. But if you take out all the reversals from last year that we put, we're actually in a better position than we are last year. And net profit for the quarter stood at about MYR 122 million, driven by net foreign exchange gain and the Malaysian ringgit strengthened during the quarter. And airline is profitable and net operating profit closed at about MYR 3 million soft season. Passenger carried up 34%, load factor to show that the recovery in demand for flying 84% versus last year. Average fare dipped a little bit from last year at about 14%. As you know, we are coming from a back in a stronger market last year when fares were very high in the environment. But now as we put more capacity, more frequency, there's a bit of dilution in the fare. But I think that looks pretty quiet. If you look at versus last quarter, it's pretty much as close to flat, but still remains strong from where we are. Sectors flown on note also, the fares is still way higher than where it was at pre-COVID levels as well. Sectors flown up 26%, which is important. Average fare, as I said earlier, mainly driven by a lot of new routes as well that we started in the quarter, Chongqing and Changsha, 2 Chinese markets that need a little bit of stimulation to make sure that we fill those planes through of those routes. RASK improved about 5% higher year-on-year, MYR 0.1543 in 3Q '24 and driven by 17% year growth in ASK. 23% increase in total revenue with 34% take-up in the number of passengers carried. CASK MYR 0.1398 in 3Q '24, up around 20% year-on-year. And really, this is just really driven by an increase in number of flights, frequency, really ramping up operations. Staff expenses is really just in line with more cabin crew coming also and pilots and the paying of flight allowance and block hours. Maintenance costs was also increased as that was due to higher number of C-checks and also, unfortunately, the supply chain reason as well where even some of the cost of spares has driven up due to demand and shortage of spares and also higher user charges as we go into new markets. Reversal of travel vouchers for 3Q '23, which brought forth positive other operating expenses. The company CASK and ex-fuel continue to outperform peer airlines, again, as I mentioned earlier. This is just a slide to show you where we are in terms of costs still remain the lowest in the market. This is due to the cost per seat spread of number of seats that we have and still remain fairly, fairly disciplined in terms of cost leadership. One of the reasons also driven lower cost as well as the high utilization. We're clocking around 14 to 15 hours effectively to ensure that our cost is low, prudent management of operating expenses despite ramp-up operations. And of course, we are further bolstered with the strengthening of the Malaysian ringgit during the quarter. Ancillary performance, this is probably one of our bread and butter as always, continue to outperform. Ancillary revenue contributed close to 34% of total revenue at about MYR 268 million on the back of a 34% year rise in number of passengers carried and boosted by diligent fine-tuning of products, services and user experience. Ancillary revenue per pax recorded MYR 247, up by 4% during the -- driving the 40% higher in ancillary. The biggest performer for us potentially is also seat as we become more marketing in terms of making sure you can pick your seat and also upgrades and that we have been offering to passengers and also pick a seat. So that's up 7%. In-flight meal really has been our success story, 23%, and that's driven by, as I said earlier, the menu and also the variety of things we have to offer on board. And of course, baggage has always been status quo in terms of how we price it, but I think we noticed that the demand for baggage and people and also our prudent baggage management in terms of making sure that passengers don't overcarry, people are becoming more prudent in prebooking our baggage upfront, so which that has driven to about 27% year-on-year. Just to quickly go through TAAX. Revenue up 5% to MYR 300.7 million. Net operating loss recorded at about MYR 79 million, driven by higher maintenance and overhaul expenses and also the increase in staff as they ramp up operations. Net profit charted at about MYR 55 million in 3Q against a net profit of MYR 749 million in 3Q, which is mainly due to reversals as they went through their TAAX rehab plan, which we completed in September 2023. Number of passengers carried increased marginally and load factor was healthy at 80%, down by 2 percentage points. ASK capacities contracted slightly to 1,771 million due to sectors flown increased by 5%, surpassing the growth of 2% in seat capacity. TAAX expanded its network this quarter with the launch of Nagoya, which is the biggest success story for Japan, for Thailand, which is their fourth destination in Japan. Just to give you a bit of color on our network plan today. I think over past COVID, we've grown from zero to serving 22 destinations in November '24, probably the quickest recovery that we could imagine and try to ensure that planes coming online as well. Following markets that we have to make sure that we dominate China as the group itself carries about 22 destinations in China, we continue to build and add even further with that -- with the introduction of Changsha, Medina and also the success story of Taipei-Osaka into the network in 3Q '24. Further expanding the reach also with the recent inaugural flight of Nairobi in Chongqing, which we saw very strong encouraging load factor as well. Just to touch on China, we grew to 43 flights per week in November 2024 compared to 19 flights per week in the previous year. So that has been a massive story for us as we build. I think a lot of that, again, I said in the last results, A lot of that is driven by the visa free regime that has been introduced between Malaysia and China. And you heard recently, they've extended that even further from 15 days to 30 days, which is a massive upside and also as well. Seasonal flight to Sapporo continue to do well to start in October, and that remains very strong for us in December up to Chinese New Year, where our loads are generally are close to the high 90s already, which is great. AAX's immediate outlook, tapping into our current prospects. Just to touch again, one is to focus our network plan, focusing on the -- across the regions. As you know, we dominate in Australia. We dominate in North Asia. We dominate in China, but really now it's just to make sure that we are connected to new markets. As you know, we started Central Asia and we started Africa, and we want to ensure that Kuala Lumpur remains connected to the world. And due to the recent study by someone, and it was ranked the world's second most connected airport after London Heathrow. I think there's a slide on that. And then we're also rebuilding capacity for the year of many routes venturing to new unique markets, as I explained earlier. I think the biggest task for me and the team really was just to make sure that we have our fleet back. As of last week on Thursday, our first flight of the 17 aircraft flew, which is great. It's been out of service for about 3 years. So that's good to see it coming. As I said earlier, the next one is coming out in February and to ensure that aircraft utilization is maximized to meet all the network requirements as we grow. And then commercial plan is really to ensure that we became very, very nimble and very, very excited about how we grow ancillary. The team -- I mean, yesterday, we had an ancillary review strategy meeting. We have a lot of initiatives coming up for next year where we believe that even though we didn't budget it in our budget plans, but there's a lot of upside in terms of the new pipeline that's coming for ancillary. I think that you can stay focused as we go through every year. The other one that we're really focused on is to ensure that we elevate FlyThru as AirAsia comes back into play with the aircraft being brought in from grounding and us coming in, that allows us to even have more routes and more destinations to fly and allow FlyThru to even increase. Back to pre-COVID, we were sitting at about 36% in terms of FlyThru; now we're about 20-plus percent. And what we want to do is to make sure that we increase that back to that 40% level with more frequencies and more destinations. Proper focus area, which is really, really what we're doing as well is to make sure that we are engaging with Capital A to progress the company's growth ambitions for the years to come. The corporate exercise is going on. Both companies have really got their shareholders' approval. Fundraising is underway behind the scenes and to ensure that all the relevant approvals and CPs are secured and worked on as we speak. The other thing really is just the infrastructure that we've built as it is just an idea of the map that we have. We've grown our passenger -- what we've built over the past 23 years, 2 hubs to over 15 countries, routes from 22 to 258, unique routes to 92, 6 million and to about 90 million guests from 2019. So this really is a testament of the whole network and you do value us and you value the group. This is really, really the strength of the business, how we've connected people across the world, again, with new as AirAsia expands into India, into China as well as us expanding into Central Asia and Africa, there's a lot of potential as well. I think potentially next year, we're exploring a little bit of routes into Europe, hopefully, and see how that goes. But I think there's a lot of potential. I mean the routes that we even like, for example, Nairobi and Kazakhstan has been a success story for us, and we will continue to make sure that we find new hidden gems into those routes that operate. And the market share, as you can see, I mean, I'm sure you see this in Capital A slides, market share, we remain the leader in most markets, and we shall make sure that we continue to dominate that as well. Oh, yes, this is what I referred to now, we are the most second connected airports after Heathrow. That just shows the strength that we have in terms of Kuala Lumpur, one, the biggest story, success story is to ensure that we give the opportunity for people to fly, people who's never flown before and people to fly more frequently with AirAsia. And one of the key things is being affordable and to ensure that they see the world with AirAsia. Other Southeast Asian countries, Bangkok is #12, Singapore is #13, Manila is #14 and Jakarta is #22. So that shows what AirAsia has done to Kuala Lumpur. And then one of the biggest story, I think, which I think Tony has also been mentioning as well is we are connecting the dots. If you go to KLIA2, you see the departure board, everything is AirAsia, and you can see the destinations that we connect to. And I think the key focus for us is to make sure that we are the next Dubai but low-cost style and making sure that we are a multi-hub connectivity. Two biggest for us, number one is to connect through Kuala Lumpur and Bangkok. And then we will connect that to East Europe via Europe one day. Philippines as well is a goal that we're looking at as well through the short haul and probably having a long-haul aircraft in there in Vietnam and also growing Senai and Phuket as a hub into secondary hubs moving forward. But I think the key thing for us as well is just to sum up the 3Q is it's been a very, very good year for us. As I clearly said, 9 quarters of profitability. As you see the cost as it is, it's in terms of MRO, the positive side is looking forward towards here is ADE as well has secured a 330 certificate where they were able to service 330 [ A330 ] aircrafts. I think the team is putting a lot of our aircrafts into ADE next year, and that potentially will save costs in terms of pricing, in terms of traveling into all the other MROs. ADE as well will be competitive pricing in terms of local labor. And you can see that, that will drive costs down as well and with ADE having 16 lines and having -- and they can fit in about 2 widebodies, it's just a positive upside. For us, we have 13 C-checks for next year, and we want to make sure that we try to reduce as much cost as we can and work with them as well. Number two as well is to ride and move our aa.com portal as they grow and becoming the #1 OTA in the region, we are riding to make sure that AirAsia X and also AirAsia Group remains fairly strong and very visible in that web to ensure access to even whether it's through AirAsia flights or through other flights that they have in terms of airlines. So that's something that's very positive with us. But yes, this -- I would imagine probably be the 2 and the third is potentially ancillary, which I believe is a big growth for us to make sure that, that adds revenue to us as a business moving forward. Four is looking forward into fourth quarter, as you know, it's probably one of our strongest fourth quarter usually throughout the year. load to remain fairly strong. And most of the markets that we see now towards year-end, flights are generally coming up to about the high 80s already. Routes are at a fairly strong for us. That does really well in December, January and February is Australia, Japan, Korea, India. Kazakhstan remains -- was a surprise for us, also heading in the high 90s for the winter and Nairobi, which is a surprise for us since November has been picking up quite fast hitting about close to the high 70s as we speak now, which is great. So I think a lot of potential. And while also on top of that, we support some of the short-haul routes as well as they have short of capacity and we support through KK, qing and also Bali as well in terms of the wide-body operation to utilize 3 day time slots that we have while some of the aircrafts are still in the ground on that. So on that note, everybody, I think thank you very much for all your support. It's been a great year as we move into fourth quarter. So I hope we shall now open up for questions, and we'll see how -- and I'll try to address as much as we can as we move forward. Thanks, everybody.

[Operator Instructions] [ Siyang ] you have your hand raised. Would you like to unmute and speak? No more hand raised. Hi, Matthew.

I just want to ask what's the updated time line for the AX wallet and also the -- what's the update on the pipe placement? Because I believe the order time line presented in the EGM was November or December for AAX service...

Yes. I mean that's something that's still on the target. We are still -- there are a few other things that we're still finalizing in terms of the CPs and all that. So that's the target plan at the moment. So -- but we will give further update as we go on. We're trying to -- as hard as we can, try to complete by December, but if we can't, we may just move into January or so that's the target for us. What are the CP spending? I mean there's a lot of CPs going around. We have to make sure there's a lot of CPs that related to the Capital A that we have to meet as well. So a long list, but we're nearly there. But of course, the placement as well is being worked on. I think that's probably about halfway as we speak. So as I spoke earlier, I think that's something that we're trying to complete as fast as we can. But if you're asking if there's any hurdles, I don't think so.

Hi, Sam.

Just a couple of questions from me. Number one, your EBITDA has gone up quite substantially passed the MYR 300 million mark. So in the fourth quarter, should we assume that there will be a provision for the EBITDA sharing arrangement that you have with the creditors? And that's one. And then number two, how do you see fares going into the fourth quarter? Because first quarter stood out really strong started normalized in tandem with seasonality. I was wondering what the fourth quarter is looking like so far?

Yes. So I mean, I think as I said earlier, I think we -- in terms of our forecast going forward, even now, I think we're kind of on target. Third quarter, I think there's a slight bump in terms of -- I think there was some fair weaknesses as well. But I think -- but I am quite happy in terms of where we're sitting now. 341, as you said, yes, fourth quarter looks fairly strong, may exceed your last year's one. May I think I'm just being conservative, but I think we will -- because a lot of it, I think I would say 40% usually of our contribution of the full year comes from fourth quarter. So I think that's something that is a lot of upside there as well. Your second question, you're asking about what? Fare?

The EBITDA share arrangement, the...

Profit sharing.

Yes, yes, yes. We exceed that, yes, we have to share the MYR 300 million. But if it exceeds above MYR 300 million, yes, we have to start profit share.

Right. So you haven't accounted for that yet in the fourth quarter from the momentum so far you have for the whole year, you have first 2 quarters already.

Sorry, can you -- were you...

You're asking if we have made provision on the books for this profit sharing, is it?

Yes, that's right, yes.

Yes, we have.

All right. So the fourth quarter but just routine, right? So, all right. Okay. I understand.

Yes.

Right. So going back to fares for the whole year, I mean, for the fourth quarter, where do you think you'll land -- land you back in -- in case [indiscernible]

No. I mean I think -- I mean I know this is every quarter question for you, but I am quite -- in terms of where we are in the fourth quarter, we're fairly strong where we are pre-COVID. I mean that is quite clear. But I think I don't want to oversell as well. So -- but I think just looking at where we are in December, looks fairly, fairly strong, especially in Australia, Japan. We're already on those markets already hitting at about 90% load factor. And in terms of the tier bucket in terms of the fare, we're already at the high end of the tier buckets as well in terms of the fare moving up. So I'm quite confident. The only things that -- I think the only things that we need to push is China. China is the total opposite of all the other markets that we operate as they come off COVID weak in third quarter, where -- which did well for us in this quarter, it goes down slow in December. So you will see that we will potentially lower fares for China to stimulate load. But in general, if you look at holistically as a whole fare, whole load factor, it looked really strong. And I think that will probably be aligned with where we were last year as well.

Right. Okay. Should align with last year. Okay. Just one last so-called fun question for me. Mars is getting a new A330 very soon. When are you going to get yours?

No. I mean Mars -- you've got to realize, there's 2 different catalysts right? So Mars, they have a lot of A330-200s, very inefficient. So they can't go far. And those are older aircraft. They are close to about 18 years, 17 years aircraft, right? So they need to replace that first and lease and get that out. For us, we have all the new generation A330-300s. So our average age of our fleet is about 8.5 years to 9. So we're fairly young. I think our oldest aircraft is only about 14 years, so -- or 14 to 15, and that's only on the low side. So a bit different. We can't compare it that way unless they have more A330-200s and also the average charter capacity as well moving out. So for us, the 330s, it's something that we've put back a little bit. We are happy because at the moment, the low rates of the 330 [indiscernible] we're enjoying it of the restructuring era. So we're still paying way below market, which is great. So we want to make sure that we enjoy it as much as we can. But I think as Tony said as well in the call is we want to make sure that we try to find as many narrowbodies into AAX as well. I think with the XLR and potentially the 321LR, we're trying to take advantage of that to grow the market and see and fly some of the destinations where 330 widebody is a bit too much. So that will enhance yield and also lower the cost structure for the business as well. So at the moment, in the next 2 years, it's just status quo as we can, and we just see what's in the market for 330-300s.

[indiscernible] I'm [ Hazmi ].

Sorry Hazmi. Can we proceed with [ Shaoyu ] first. I think he raised his hand first.

Yes, I think a few questions from me. The first one is on the slide. I think it's on page...

You talked very fast. Can you speak close to your platform?

Okay. Is it better now?

Yes. Yes.

All right. Great. Okay. So the first question is on the Slide #6, right? There's a reversal of provision for travel vouchers in the third quarter last year. May I know how much is it?

Yes. [ MYR 500 million ], right?

There's a few -- there were a few reversals that were done in quarter 3 '23, mainly the provision for tax in IAAX was around MYR 70 million and MYR 40 million was relating to travel vouchers. So it's MYR 109 million done in 2023.

All right. So MYR 109 million. Okay.

Yes.

And the -- yes, speaking of Asia X, Thailand, right? What's your expectation on Asia X Thailand? Specifically, when would it start recognizing profits? Do you have any expectation on that?

I think we look at the trends, I think we are targeting next year, probably towards the second half of next year. So -- but I think as they have been hampered quite a bit this year in terms of bringing aircraft back into the system. So I think next year, they're targeting for another 2 to 3 aircraft being back operational. So if they go at the trends, their market is a bit different than us because the demand for Thailand for tourists is much higher than us. You can see the loads is fairly, fairly high. And so I think internally, just internally, we think by second half next year, we'll see something. I can't tell you whether it's third or fourth, let's see if they do well in the first and second, it may be earlier.

I see. Okay. But then for the third quarter this year, right, the results, the performance is actually -- I mean, they made a loss, operating loss, right? This is mainly...

Yes. A lot of that is driven by market actually. I think the Korean market has hampered them quite a bit because of immigration issues for Thais going back because I understand from just recently that there's been a lot of NTLs going into Korea. So I think that's been impacting them quite a bit. But generally, I think it's just -- it's a good year for them and the utilization of the aircraft as well has been quite low. So I think moving into December as they increase some of the frequencies into Osaka, Narita, you see that it will come back very strong.

I see. Okay. Okay. So are you expecting to have higher load factor or -- as far as passengers carried next year? Do you have some sort of guidance?

In terms of Thailand or in terms of Malaysia. In terms of TAAX or in terms of MAX?

TAAX.

Yes, their forecast of load factor is very high. So I won't be surprised that they will hit it. So historically, you can see their load factor always in the high 80s easily. So I'm quite confident that they will hit that out.

I see. Okay. All right. And then my next question would be on the profit sharing agreement, right? So you said you have made provision this year. How much have you made so far?

We have made provisions from 2023 already on the balance sheet based on the expected sharing over the next few years. So we have put aside of around MYR 30 million.

So this MYR 30 million was recognized -- was provided for back in 2023?

Correct.

And have not been reversed out or anything and such, right?

That's right.

Okay. Okay. Did you expect any further provision for this one?

We will assess it again at year-end, together with our auditors.

I see. All right. Okay. And my last one on the CPs, right? So for CPs for AirAsia X, I mean, can the deal actually go through, when I said the deal, I'm talking about private placement warrants, et cetera. Can you actually go through if, say, for example, Capital A cannot get the High Court approval on time?

No, that's all -- the High Court, I think, is separate. But in terms of placement, that's the CP. So prior to the deal being completed, there's no private placement, there's no deal. There's also a lot of novations of guarantees that are is as well that we're working on. So that already is in progress, some has come through, some still in the final documentation stage. So yes. And the others are all just like MAVCOM, we got approval already. Some of the [indiscernible] stuff, we got approval already. So that's generally just all in the process. It's painstaking, but we're getting there.

I see. So the high court approval is separate from the private placement and the warrants?

Correct. Correct.

Hazmi, sorry for interrupting just now I think. Please unmute and let us know of your questions.

Okay. So I just want to ask one simple question. What is your expectation this low-cost air -- low cost airline business evolves in the next 5 to 10 years?

Can you repeat that question again?

What is your -- how do you vision this low-cost aircraft business model will evolve in the next 5 to 10 years?

Well, I think that's very -- I can spend 5 hours and write to you and have a chat. But just generally, I think just to let you know, we just turned 17 years early November. AirAsia Berhad is turning 23 in a week. So we're still here. And we've become from a 2 aircraft operator becoming now close to about 200 aircrafts. So you can see how we've grown. We've become the biggest low-cost carrier in this region, close to the largest. We have widebody, narrowbodies. We have different entities in different countries, similar, Thailand, Indonesia, Philippines, Cambodia, and we've also created all other peripherals of businesses that we have. There's MOVE, there's ADE, there's Teleport. Really, we've grown through it. And just to highlight as well is we came through COVID with no support of the government, and we turned it around and we're back again where we are pre-COVID. So your question is where we'll be in the 5 to 10 years, I think we'll be better and stronger. We'll be very lean. And I think we want to make sure, as I said in the slides, that we'll be the #1 -- we'll try to be the #1 and be the Dubai of the world and make sure that we connect the world, whether it's through Kuala Lumpur, whether it's through Thailand, whether it's through Indonesia, whether it's through Philippines and make sure that we connect everywhere as it is. So I'm quite optimistic that we will grow that and ensure that we dominate in all regions that we can. So the ecosystem is already set for us. As I said, everything is there. We've got our own ground handling, our own MRO. We've got our own big data. We've got our own online OTA, Everything in the ecosystem, own cargo is there. So I think it's the only story that we can tell is -- so I hope that helps you for -- in the summary.

No. My question is just that what is your -- how do you see this -- your industry will evolve, not just AirAsia, but a low-class carrier as a whole, in general, will evolve in the next...

I think -- have you flown AirAsia before?

Yes. I flew in the AirAsia before.

Do you think that we're low class? Are we low class?

No, no. I'm sorry to use that -- low cost, sorry.

Okay, okay. You used [indiscernible] with low class.

No. I'm sorry, sorry. It's just that I was -- because I read somewhere, they said that low-cost carrier business is not evolving fast enough in -- for the growth to be sustainable for investor for the next 5 to 10 years?

No, I think you see where we are now. I think we -- you see us as a group, there's a lot of lessors, a lot of financial wanting to work with us. They believe in the story. And I see you see on the Capital A side, the funding they've been getting as well has been very positive and the support in terms of the -- everybody else that we get. So I think in terms of sustainability for the low cost, it's there. If the only way you could think that you are right that our low cost or low class that you say we are...

Sorry, what that...

Our load factor wouldn't be 90%. So I think that's very important. So -- but I think the fact that we are 90% -- just to let you know of the 90% load factor that we operate, 30% of those people are people that's never flown an airplane before. They are the first time. So we are there to stimulate new market. We are also stimulating people that, for example, if you want to go to London or go to people would say 5 years to go there or 4 years for the people -- middle income people, not bankers and all that, but people who can't afford to go, they will now go 5 times a year, 4 times a year. Singapore last time used to cost MYR 1,000 to go. Now you can go for MYR 200, we get people go wherever we can. So what I'm trying to say is we're here to make sure that flying is affordable. We are making sure that we -- you can choose your option to fly. You can fly with your bags and still fly very cheap than everything else. So in terms of sustainability, in terms of investments, we've been here. We've done a lot of private placements in the past, a lot of support. We raised money as well. Last year, MYR 50 million, 2 big investors came in, supported us because they believe in the business. You've seen our share price -- during COVID, it was only MYR 0.20. And now we're hitting at about -- in the high last week at about MYR 2.30. So to answer your question, they do believe in the business. But as I said, it takes time for us to come back. So there's a lot of things that is happening now in the corporate side as we speak, a lot of upside. And I think I'm very, very bullish in where we're going to head in the future.

[ Hang Xiang ] please unmute and share with us your questions.

Question is, can you help us to reconcile what happened to the jet fuel price -- because last quarter -- I mean, this quarter, the jet fuel price is $101, right? So last quarter, it's about $104. So it's only dropped by $3. But looking at the oil price, actually it should be dropping more? Can you help us to understand this?

Can you repeat the question again? I didn't quite get you.

Yes.

Okay. Can you hear me clearly enough?

You keep cutting off, right, so I just try to capture it until you can get it.

Okay. Better now?

No, you're cutting off.

Okay. Still cutting off.

Yes. [indiscernible] your laptop. Can you be close to your laptop?

I'm actually using my earphone. But it's -- yes [indiscernible] the questions.

Can you -- you can -- I answer the question, can you type it in, if you can, I'll try to answer that. [Audio Gap]

Sorry, what do you mean by drop your -- what is your expectation, again, sorry? This is based on our market price. [indiscernible]?

Okay. Yes, I understand it's based on market price, but when you look at the terminal prices, it's actually dropped more, right? Can you explain to me why this is the case?

We'll get back to you.

Yes, we get back to you. You send us the data because what we do in how we disclose this is based on market.

Market price.

Average price and market price. So show it to us, and we will see how it compares to us because I think -- yes, I don't think that...

It's actual cost.

It's actual cost. We don't play around with our data.

[ Jarrel ] I saw your question in the chat box. Could you just check what is it that you mean by Protocol 5.

I said open sky policy. I mean we don't fly to ASEAN countries. So I mean, I think it's good for AirAsia where you can fly from capital city to capital city basically Kuala Lumpur, Singapore, Jakarta. So it's a positive upside. But for me, I only fly to Denpasar, and that's it really. So it doesn't really benefit me enough.

Matthew?

Yes. Just a question on the CASK ex-fuel and the RASK. Could you give us some color as to why did the CASK goes higher year-on-year as compared to RASK?

No, I think the answer to this is basically, I think in the last quarter, we started -- actually, to be honest, this year, we started a lot of new routes, new destinations. So as I said earlier, a lot of the operations costs in terms of ground handling, user charges, manpower has gone up in the fastest thing. And plus to take note, we did not have manpower for our new aircraft that were coming in. So we needed to make sure that they come in. And obviously, as you see now, our utilization is up 15 hours, the crew hours also has been increasing. So we have to pay more allowances to the crew. So generally, it's just in line with very fast growth, while revenue as it is also is growing as well, but the CASK in terms of making sure that we go into markets is growing faster than usual. But I think next year, as we go into 2025, you'll see that the CASK growth will not grow as much as you can. And the only one that's going to grow in that is probably -- I don't know whether -- I don't know where the market is going to go, but variable in terms of the fuel and currency. But other than that, I don't think that will grow as much because there's not many or only 1 or 2 new destinations as we are. So it will be very, very flat or even lower potentially.

All right. Another question is on the MRO costs. I believe the third quarter is MYR 155 million, which is like a 20% increase Q-on-Q. Is it related to the reactivation of the 17 and 18 aircraft?

Yes, and also C-checks. And we fly more as well as you pay for the engine hours and all that kind of stuff. So yes, so a lot of that is the C-checks that we have. Unfortunately, this year and next year, we have a lot of C-checks coming in as aircraft come back into service. So next year, as I said earlier, you'll see the MRO cost also quite high because there is 13 C-checks that is due for next year.

I see. So can we expect the MYR 155 million to be the average amount per quarter going into next year? Or is it -- or should it come off?

No, I think for December, I don't know whether we were going to provide, but I think it will be lower in the fourth because there's not many aircraft going in for C-checks. But next year, I think every quarter, you'll see -- I think it will go -- it will pick up in second quarter next year as more aircrafts are going in for the C-checks.

All right. Then also lastly, could you actually help us break down what's the other operating costs or expenses that was incurred this year? It cost, I think it's MYR 33 million, right?

Yes. So basically, a lot of it is as we started new routes, we've been advertising a lot in terms of publicity, promotions and all that. It's about MYR 8 million higher than the previous quarter as we started -- as we tried to promote Kazakhstan moving forward. We started early in Nairobi as well with Chongqing. So that's a lot of we've been doing. Secondly, as well, hiring all these bankers and corporate exercise is not cheap, lawyers and all this. So that also has been increased by corporate cost in terms of what this year versus last year. And also, there's also some small reversal of activation fees and also travel vouchers, unutilized travel vouchers that we reversed back as well. In the prior year. Yes.

Could you share what are the one-offs from this quarter that we might -- we would not see in the coming quarters or next year?

Promotional and publicity and advertising expenses that should not be at that level.

What will be the normalized level?

We'll probably go back down to around MYR 20 million. I'm just trying to go through the chat box so many -- where are we? No, I can't say much about the placement. So I think -- I mean, at the moment, we're all in the high-level discussions at the moment. So I can't disclose where we are. But I think in terms of where the feedback that we've been doing, it's been very positive, okay? I already covered Protocol 5. Could it take away some business from you in terms of protocol? No, I don't think so. As I said, no impact because a lot of our point of destinations, a lot of the dominant people that are flying on Asia X are mainly from Kuala Lumpur. And I would say about 60% of our market is Malaysian driven, while 40% is international. So Australia, China, Japan, India, Kazakhstan, all that is 40%. So I don't see that impacting because they are not in the ASEAN region. So I don't see that as an impact for us. Regarding unrealized ForEx gain, what is mainly related to that in terms of the lease?

Unrealized.

Yes, unrealized. So that's basically, as you know, we pay leases in U.S. dollars. Can you confirm again? I just heard Bin said that 13 planes going to C-checks. Yes, this is all AAX planes. I mean we're only talking about AAX, right? So yes, USD fell in 3Q, but fuel costs in ringgit didn't fall. shouldn't it?

We utilize more barrels.

Yes, yes. As you know, we fly more barrels. We fly more flights. So therefore, more barrels we consume. So inherently, the cost will increase.

90%.

David, some C-checks are 3 weeks, some C-checks are 2 months. It varies. So it depends on the severity. Your big checks and the 12-year checks, which are usually about 2.5 months. Your C8 is around 3 weeks. Your C6 is about a month. Your C10 is about 2 weeks. So it varies. This I can go on forever so long. Any more questions, guys? Okay. So any questions, guys? Can you just revert to Jane and all that. So thanks for your support and everything else. I think as I want to address, I think the key thing is, I think we're in a very good position as we move to the next 5, 10 years, we'll be the #1 low-cost carrier to make sure that we dominate the market. So I think that we're very, very upside. As I said, the ecosystem for AirAsia and AirAsia Group is fixed. There's a lot of upside. So I believe that this is a good success story. And third quarter is -- I mean, internally, I think it's been a good quarter for us, 9 quarters profitability. And as we move into fourth, that will be -- we'll end with the bang. So again, thanks for your support. Hopefully, I'll update you if anything in terms of placement or where we are in the corporate exercises. I think we're very transparent on that. So we'll let you know when it gets closer, whether it's December or January as we get closer. So again, thanks for everybody guys for coming on your Fridays. We'll catch up. Okay. Thank you.