The AirAsia Group saw its net profit nearly double in the third quarter thanks to one-off items, but operating profit dropped significantly mainly because of rising fuel costs.

The group reported a 3Q net profit of RM804 million ($192 million), up from RM434 million in the same period a year earlier. The result was boosted by the sale of its stake in a joint venture with Expedia, and the reversal of deferred tax liabilities. Excluding these factors, the group’s operating profit was RM253 million, down 49% from RM494 million last year.

Revenue for the quarter increased 7% to RM2.6 billion, partly because of a 9% increase in passengers and average fares up 3%. However, load factor decreased by 5 points to 82%, as the 5% traffic gain was exceeded by a 10% capacity rise.

Unit costs rose 12%, with fuel price increasing by 50%. Unit costs excluding fuel dropped 2% year-on-year.

The group earnings report includes the core Malaysia operation, and subsidiaries in Indonesia and the Philippines. AirAsia also has joint venture affiliates in India, Japan and Thailand. While the Malaysian unit posted an operating profit in the third quarter, the others recorded operating losses.

The operating environment in the fourth quarter has improved compared to the third quarter, AirAsia Group CEO Tony Fernandes said. The holiday season is coming up, and “forward air travel demand is still going strong for all our key markets,” he said, noting that easing fuel prices will benefit the airline in December. “We are watching the fuel prices closely to increase our fuel hedge for 2019 and 2020,” he said.

For the full year, the group said it is on track to achieve a load factor of 85% and a net profit.

One of the group’s goals for next year is a financial turnaround for the Philippines and Indonesia units. Fernandes said AirAsia has plans for a secondary stock listing for the Indonesian carrier in 2019.

AirAsia also intends for its India affiliate to begin international operations.

Adrian Schofield,