AirAsia, Asia's largest low-cost carrier by fleet size, said Wednesday that first-quarter net profit fell 39 percent year-on-year due to a foreign exchange loss on borrowings.

The airline said in a filing to the Malaysian stock exchange that profit for the three months ending March 31 was 104.79 million ringgit ($34.79 million) compared to 172.44 million ringgit in the same quarter last year.

Revenue for the quarter stood at 1.30 billion ringgit, up 11.3 percent from the same period last year, due mainly to a 7 percent increase in passengers, the company said in a statement.

"The company has started off the year strongly, driven by an outstanding financial performance last year," said Chief Executive Officer Aireen Omar.

AirAsia has also set up subsidiary budget carriers in Indonesia, the Philippines, Thailand and Japan.

Thai AirAsia recorded a 24 percent increase in revenue, while Indonesia AirAsia's revenue rose 34 percent in the first quarter year-on-year, it said.

AirAsia Group Chief Executive Officer Tony Fernandes said the company would continue to expand in each of its markets.

"It is important not to be complacent, especially with the new competitive landscape" in Malaysia, said Fernandes, a former music industry executive.

The low-cost carrier has grown from two planes when Fernandes bought the then-struggling airline in 2001 to a total fleet of more than 120 A320s.