Air Asia (incl QZ8501)

Air Asia (incl QZ8501)

Postby winston » Wed May 11, 2011 11:30 am

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AirAsia:Upgrading to BUY; associates to drive growth( RM3.06 / PT: RM3.75 ) Jacinda Loh; Raashi Gupta

Action: Upgrading to BUY – better visibility on IPOs / continued strong performance despite oil movements

A scenario of potentially slowing growth from plane delays, stronger competition in the Malaysian market (comprising 50% of the business) and uncertainty over repayment of receivables formed a big part of our former Reduce call.

Earnings have not been affected and potential write-downs have not materialised, counter to the scenario underpinning our earlier conservative stance.

Two quarters of profit-driven debt repayment by AirAsia’s Thai and Indonesian associates caused receivables to fall by >50% by end-FY10, while following a company visit last week the IPOs of both associates appear on track for year-end, ensuring associates’ earnings contributions in FY12F and bringing ASEAN earnings exposure.


Source: Nomura
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Re: Air Asia

Postby winston » Wed May 25, 2011 10:00 am

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Valuation/Recommendationï‚·

Maintain BUY. Our target price is RM$3.70, or 7.5x EV/EBITDA to 2011F earnings.


Share Price Catalystï‚·
Lower fuel prices.


Source: UOBKH
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Ichimoku Kinkou Hyou (Itchy Mushrooms)

Postby GeraldFx » Tue Aug 16, 2011 6:39 pm

AIRASIA hold by strong bullish kumo but flat TS/KS is not a good sign.
Forming hammer at KS could means another buying opportunity in days to come. Only time will tell.
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Re: Air Asia

Postby winston » Sun Sep 14, 2014 8:31 am

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Analysts upbeat on AirAsia
August 22, 2014

PETALING JAYA: Analysts are mostly positive on the prospects of AirAsia Bhd following the low-cost airline’s second-quarter results that saw it post a spectacular overall profit but a core net loss stemming from its overseas associates.

On Wednesday, AirAsia reported a net profit of RM367.16mil for its second quarter ended June 30, which was more than a five-fold rise from RM58.35mil it achieved in the previous corresponding quarter.

However most of those profits were due to foreign exchange gains on borrowings and deferment of taxes while the carrier’s operating profit recorded a 17% year-on-year decline to RM174.19mil from RM210.1mil previously. This was due to losses stemming from its overseas associates.

RHB Research thinks that the worst is over for AirAsia, as the outlook will improve in the second half of this year.

The research house also noted that AirAsia’s management had indicated that ancillary income was expected to increase in the second half following the launch of several new products, which could give the carrier an additional RM5 per passenger.

“AirAsia has also submitted an application to set up an offshore entity specialising in the sublease of all its aircraft to its affiliates. With this entity, the airline ought to be able to progressively dispose of aircraft operated by its affiliates, some of which are parked in its balance sheet.

“Management is optimistic on the potential reduction in capacity, which could give significant room for improvements in yields going forward,” RHB Research wrote in a report.

AllianceDBS Research said it remained convinced that AirAsia “will be able to weather the cut-throat competition and emerge as the final victor”.

AllianceDBS also pointed out that a more “benign” competitive landscape was around the corner, with Malaysia Airlines expected to cut back capacity next year.

“If there is an airline stock to own ahead of the coming upcycle, AirAsia is the one,” the research house said.

MIDF Research said it expected the second half of financial year 2014 (FY14) to be better as losses from Indonesia and Philippines would bottom out then.

“We believe AirAsia would benefit from MAS’ restructuring should the latter trim down common routes which AirAsia also operates,” MIDF said in their report.

Kenanga Research downgraded AirAsia to a “market perform” call and lowered its estimate earnings for FY14 and FY15 on concerns of higher operational costs.

Its analyst Adrian Ng said travel sentiment had been badly affected by various incidents, notably MH370, MH17, the political unrest in Thailand and the Ebola outbreak.

Ng added while he was hopeful to see recovery in AirAsia’s yields, he opined that it would take at least another six months before airfare stabilised.

Source: The Star
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Re: Air Asia

Postby winston » Sun Sep 14, 2014 8:45 am

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AirAsia seen to benefit from Malaysia Airlines route revamp BY LIZ LEE
September 3, 2014

PETALING JAYA: With Khazanah Nasional’s recovery plan for Malaysia Airlines (MAS) laid out, analysts believe the AirAsia group is the likely direct beneficiary of the potential industry route restructuring on the medium-haul network, which allows the industry yields to rise in Malaysia.

CIMB Research noted that AirAsia X’s share price has already reflected the positive impact from Khazanah’s announcement which had specifically mentioned the need to focus and build scale on regional routes.

AmResearch also noted that there was no clear winner from MAS’ restructuring plan other than AirAsia X, potentially.

“We think sector yields are reaching a bottom – MAS’ targeted cost of available seat-kilometre is already close to current revenue of available seat-kilometre, which means it will unlikely be much more aggressive in pricing, but a recovery could be sometime away given continued capacity expansion on regional routes.”

In Alliance DBS Research’s opinion, however, AirAsia Bhd will be the prime beneficiary of the MAS restructuring.

“Although AirAsia X would also benefit, foreign airlines could still encroach on its routes and negate the impact of the absence of competition from MAS.”

CIMB Research noted that the short-haul aviation market encompassing the domestic, Asean and south India and South China routes would remain the natural and most lucrative playground of Malaysian air carriers.

However, Khazanah’s equal insistence on profitability and 10% to 15% revenue per available seat-kilometre increases directly points to the industry’s aggressive pricing on the domestic and short-haul routes that has hurt AirAsia since March 2013.

“In our view, today’s rock-bottom industry yields cannot get any lower and the only way is for it to rise. Also, we believe that the industry’s cost-down efforts are meant to give shareholders reasonable returns on their capital, not to ignite another future price war,” CIMB said.

On the contrary, any cutback in airlines’ route networks will be negative for Malaysia Airports Holdings Bhd (MAHB) as the smaller network capacity will cause a decline in the number of passengers travelling through MAHB’s airports.

CIMB Research said the airport operator could see a decrease in its collection of the airport’s passenger service charge while fewer aircraft movements also meant MAHB would have lower landing and parking revenues.

“The number of travellers should also fall because the reduced competition in the airline space should result in higher ticket prices, which will have a negative demand impact,” the report noted.

Another impact on MAHB will come from slower sales at MAHB’s duty-free outlets, Eraman.

On Khazanah’s privatisation offer, analysts said it was the sensible way to move MAS out of its financial doldrums.

Hong Leong Investment Bank Research opined that the delisting exercise would smoothen the restructuring process, as MAS would not be subjected to the requirement and scrutiny of Securities Commission and Bursa Malaysia as well as the public.

“Furthermore, any strategic plans and actions will not be easily grasped by close competitors,” the report said.

RHB Research advised minority investors to accept the 27 sen offer price to avoid further dilution and deterioration in their shares.

“Investors can potentially revisit MAS’ investment once it comes up for a targeted relisting in three to five years,” the analyst said in a clients’ note.

Alliance DBS Research also advised the same despite the rosy picture painted by the restructuring plan.

Affin Investment Bank Research added that should investors decline the general offer in the hope that things improved at MAS, they could risk MAS share price falling to its fundamental fair value of only 10 sen based on one-time 2015 estimated price-to-book value.

Khazanah’s plan to delist MAS and shift the airline’s operations, assets and liabilities to a new company by July 1, 2015 will enable new MAS to operate as a commercial enterprise, with the target to bring it back to profitability by 2017 to 2019 and also allow the carrier to renegotiate its supply and labour contracts, Lee noted.

The state investment arm will inject RM6bil into MAS on a conditional and staggered basis over the next three years.

Source: The Star
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Re: Air Asia

Postby winston » Sun Nov 09, 2014 8:22 pm

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Oct 30, 2014

Air Asia (Add, TP: RM3.25).

The lower fuel price gives additional tailwind to the expected capacity cuts by its major competitor, which is expected to lead to industry - wide yield recovery, and improvement in Air Asia’s aircraft utilisation.

Unlike its long haul peers, AirAsia is not exposed to the European markets that face softening economies.

Source: CIMB
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Re: Air Asia

Postby winston » Tue Nov 11, 2014 7:16 am

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Low cost carrier AirAsia Bhd saw a marginal 1% increase in passenger numbers for the third financial quarter ended Sept 30, 2014 (3QFY14) to 10.74 million from 10.61 million a year ago, as capacity dropped 1% year-on-year.

Nevertheless, the group reported that its load factor, or percentage of seats filled with paying passengers, was up two percentage points to 78% from 3QFY13.

In its preliminary operating statistics released today, AirAsia said only four aircraft were added into the system in 3QFY14 (compared with 34 additional aircraft in 3QFY13), bringing the total fleet size of the group to 171 as at Sept 30, 2014.

Source: The Edge
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Re: Air Asia

Postby winston » Tue Nov 11, 2014 1:50 pm

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AirAsia load factor up, but sales volume down

By: INTAN FARHANA ZAINUL

PETALING JAYA: AirAsia Bhd has reported a two-percentage-point improvement in load factor to 78% in the third quarter ended Sept 30, despite it being a low-season period for the industry, due to cutting the number of available seats.

Revenue passenger kilometres (RPK), or the sales volume, fell 1% to 12.41 billion from 12.5 billion a year earlier. The company said 10.74 million passengers flew the airline during the quarter.

The low-cost carrier added four additional aircraft, bringing its total fleet size to 171 as at end-September.

Malaysia AirAsia’s (MAA) operations maintained its load factor at 77% in the quarter, with a 0.5% increase to 5.3 million in the number of passengers carried.

“As the third quarter is seasonally a weak quarter for Malaysia due to the month of Ramadan falling in July, the management allocated only one aircraft to MAA,” it said.

Meanwhile, Thai AirAsia’s (TAA) load factor continued to be on the high side, recording 82% despite the political tension and sluggish economic growth. It said TAA carried 2.9 million passengers in the third quarter, a 12% increase from 2.6 million previously, as the Thai Government took measures to stimulate the tourism sector like offering a three-month visa fee waiver for Chinese and Taiwanese tourists and declaring extra holidays in August.

Indonesia AirAsia (IAA) posted a 10% decline in the number of passengers carried to 1.8 million in the quarter from 2.06 million previously, along with a 15% decrease in the number of seats to 2.32 million.

“The management continued with its route-rationalisation exercise during this challenging time, where the country was hit by a depreciating rupiah and causing an increase in operation costs,” AirAsia said.

On its part, Philippines’ AirAsia (PAA) also carried fewer passengers at 0.62 million, a 15% decrease from 0.73 million a year ago, coupled with a 23% drop in capacity.

“No new routes or frequency were increased in PAA’s network this quarter, as management is focused on turning around the current operating routes,” it said.

The third quarter was the first time AirAsia India’s (AAI) operating statistics were disclosed.

For the full quarter, AAI flew 0.13 million passengers with a 75% load factor and two aircraft.

In a separate statement, AirAsia X Bhd said it ferried 1.04 million passengers for the third quarter, a 24% jump from 0.84 million a year ago.

The long-haul, low-cost airline, which is the affiliate of the AirAsia Group, recorded a 1.7-percentage-point-lower load factor to 80% for the quarter.

Its RPK and available seat kilometres (ASK) rose 21% and 24% to 6.37 billion and 5.13 billion, respectively.

“The capacity added was lower than had been earlier planned, as more aircraft capacity was withdrawn from scheduled services during lean periods and re-deployed to charters and wet leases in other regions that generated positive margins,” AirAsia X said.

“The intended slower injection of capacity growth from the third quarter of 2014 onwards is to allow the previously added capacity in 2013 to mature and progress towards profitability,” it added.

During the third quarter, AirAsia X grew its fleet size to 24 aircraft from 17 in the same period last year.

Its cargo segment saw an improvement of 21% to 9,771 tonnes total cargo carried from 8,079 tonnes previously, with a 41% load factor recorded.

Source: The Star
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Re: Air Asia

Postby winston » Wed Nov 12, 2014 11:06 am

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AirAsia investors should focus on bright earnings prospects

Maintain “buy” with target price (TP) of RM3.20: Malaysia AirAsia’s (MAA’s) revenue passenger kilometres (RPK) grew by only 2% year-on-year (y-o-y) in the third quarter of 2014 (3Q14).But this still managed to drive its load factor up by 0.5 percentage points (ppt) y-o-y, as available seat kilometres (ASK) growth was more tepid at 1% y-o-y.

Thai AirAsia ( Financial Dashboard)’s (TAA’s) traffic growth was more decent, as RPK grew by 7% y-o-y in 3Q14. But, its load factor fell1.2 ppts y-o-y, on account of the faster ASK growth of 8% y-o-y. Both MAA and TAA’s statistics are in line with our expectations.

Indonesia AirAsia (IAA) and Philippines’ AirAsia (PAA’s) statistics were more disappointing. IAA’s RPK fell 12% y-o-y, on the back of a 17% cut in ASK in 3Q14.

PAA saw its load factor fall 4.2 ppts y-o-y in 3Q14, as RPK declined 20% y-o-y compared to the 14% y-o-y decline in ASK.

Using ASK/aircraft as a proxy, we find that MAA’s aircraft utilisation fell 17% y-o-y in 3Q14.

The key reason for this are 12 planes earmarked for disposal, which have been grounded but remain unsold. Management now intends to put these planes back into service in 4Q14.

We believe this could be driven by difficulty in getting buyers for old aircraft and the drastic withdrawal (20% in 3Q by our estimates) of domestic capacity by Malaysia Airlines (MAS) ( Financial Dashboard) which presents an opportunity for AirAsia.

Excluding exceptional items, we expect AirAsia’s bottomline to range between a RM3 million loss and RM59 million profit in 3Q14.

Consensus downgrade is almost a certainty (45% higher than our estimate).

Despite the current weakness, we retain our “buy” rating on AirAsia. Investors should ignore the financial year 2014 earnings, and focus on the bright earnings prospects going forward.

Low oil prices are set to stay, competitive pressures should normalise (with the restructuring of MAS), and Thailand tourism growth is recovering.

All these factors point to a better 2015 for AirAsia.

Source: Alliance DBS Research
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Re: Air Asia

Postby sschong92 » Sat Nov 15, 2014 8:39 pm

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AirAsia ready to cut fares
15 November 2014

SEPANG: Low-cost airline AirAsia said it is ready to lower its air fares to stimulate the market and contribute to greater passenger volume.

AirAsia group chief executive officer Tan Sri Tony Fernandes said it would be a huge bonus for the airline if the fuel price dropped further next year, as it would cut costs.

“However, oil prices change so quickly, lets see what happens. The message is that we want to lower fares and stimulate the market.

“If the fuel price continues to drop, we may also get rid of the fuel surcharge to get more people to fly.

“AirAsia is about reducing costs and air fares so more people can fly,” he told a press conference after the ground breaking of AirAsias new headquarters here yesterday.

Source: The Star
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