The Malaysia-based airline posted a revenue of 4.47 billion ringgit ($1.48 billion) for the year, up 13 percent from 2010.
In a filing to Malaysia's stock exchange, it said net profit for the financial year, which ended on December 31, was 564.1 million ringgit, compared to 1.06 billion ringgit in 2010.
AirAsia Chief Executive Tony Fernandes said the results were positive given the challenging global environment.
He said the loss in net profit was largely due to unrealised foreign exchange losses on translation and a deferred taxation.
"Our full year results indicated that we were on the right path -- that is, we managed matters that were within our control," he said.
"This is remarkable in an environment where macroeconomic factors such as fuel prices have impacted us and every other airline," he added.
He noted average fuel prices increased 36 percent over the year, accounting for half of the airline's total cost.
Net profit for the fourth quarter slumped 56.4 percent to 135.7 million ringgit year-on-year.
Fernandes said the outlook for the 10-year-old airline was positive as the company looks forward to the listing of AirAsia Thailand and AirAsia Indonesia this year.
The airline is also expected to take delivery of 20 new A320 Classics in 2012.
Malaysia-based AirAsia has become one of the airline industry's biggest success stories after Fernandes acquired the company a decade ago, when it was failing.
Its 2010 full-year net profit nearly doubled compared to 2009.