Malaysia-based AirAsia, the region's biggest low-cost carrier by fleet size, said Wednesday its third-quarter net profit plunged a year-on-year 85 percent due mainly to higher financing costs.

Net profit for the quarter ending September 30 was 5.4 million ringgit ($1.61 million), the company said, while revenue increased 3.1 percent to 1.32 billion ringgit.

It also blamed some of the lower profit on affiliate Thai AirAsia posting its second consecutive quarterly loss due to the unsettled political situation in Thailand, whose visitor industry was hit in the wake of a May coup.

AirAsia said the quarterly results demonstrated "the company’s strong standalone performance at a time when most of the other airlines around the region are facing a challenging period and recording poor performances."

AirAsia is led by flamboyant boss Tony Fernandes, a former record industry executive who acquired the then-failing airline in 2001.

It has seen spectacular success and aggressive growth under his low-cost, low-overhead model.
AirAsia signed an agreement in July to buy 50 long-haul A330 jets from Europe's Airbus in a deal worth $13.75 billion at catalogue prices.

Meanwhile, AirAsia X, the budget carrier's long-haul, low-cost affiliate, announced its fourth consecutive quarterly loss on Wednesday.

AirAsia's success over the years has come at the expense of national flag carrier Malaysia Airlines.

The airline has been hammered by the double disasters of MH370 and MH17 this year, compounding years of financial losses.

It is now in the process of being taken private by a state investment fund as part of an overhaul.

In an earnings statement, Fernandes said AirAsia's outlook remained positive due to falling oil prices and more "rational" pricing by cut-throat regional competitors, which allows AirAsia also to command fares more advantageous to its bottom line.