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AirAsia shares rise over 5% after earnings announcement

Published on May 21, 2014 1:16 PM

KUALA LUMPUR (Reuters) - Shares of AirAsia 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 per cent due to improved passenger numbers, foreign exchange gains and deferred taxes.

Group Chief Operating 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 (S$214 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.

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