AirAsia X

Re: AirAsia X

Postby winston » Sat Nov 22, 2014 4:10 pm

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AirAsia X may need more funds, say analysts By: B.K. SIDHU

AirAsia X currently has 24 planes for its operations of which two are A340s and one A330.

AIRASIA X may need to get more capital to the tune of RM200mil to RM300mil in the near term to give it breathing space as its operation is restructured, say analysts.

They felt Airasia X should raise the funds through a private placement or source it from the capital markets. The proceeds, they say, will help it ride through the turbulent times given the competitive landscape in the markets where it operates in.

“It should get more capital, downsize the fleet and network and bring cost down,” says an analyst.

As at end September, the airline’s net operating cashflow stood at RM212mil, with free cash of RM64mil. Hence, the need to raise cash to meet its financial obligations, for aircraft financing to operating expenditure, unless it can generate cash quickly, they say.

Airasia X is due to take delivery of eight planes next year, of which it has sold one, plans to sell another next month, and enter into sale and leaseback for the remaining six.

Airasia X currently has 24 airplanes for its operations of which two are the A340 and one A330 aircraft while 17 are on lease.

However, RHB Research in its report says that Airasia X is confident about the outlook for its current cash level and may not need to raise cash from the market at this juncture.

If it chooses to, it has options to raise cash through debt (possibly via convertible bonds) and a sale and leaseback of two of its aircraft in FY15 to improve its cash position.

RHB Research says that Airasia X will continue the tactical redeployment of its aircraft, ie by wet-leasing some to third parties, improve overall income and maximise the utilisation of its planes. A wet lease is a leasing arrangement whereby one airline provides an aircraft, complete crew, maintenance, and insurance to another airline or other type of business and is paid by the hours.

The airline was thrust into the limelight after it reported RM177mil core net loss for three months ending Sept 30, 2014, and its first nine months of the year net loss swelled to RM340mil. There has been reports suggesting that AirAsia X is feeling the heat in having to pay salaries and there may be a management reshuffle. This has been denied by its co-founder Tan Sri Tony Fernandes.

“Essentially, Airasia X’s problem is that it is not generating enough cash to sustain its operations,’’ says an analyst.

Fernandes has taken on a more hands on role of the airline since this week and has come up with a plan to turn it around. He is taking a more active role setting the direction and working with the management team.

The airline has also been dropping fares to match what Malaysia Airlines (MAS) has been offering. While lower fares are ideal for travellers, the strategy has hurt Airasia X’s yields.

As for the China market, demand waned after MAS flight MH370 disappeared in March. The shooting down of MH17 further rocked the air travel market, causing all local airlines to suffer from weak demand.

“There has been a drop in demand for air travel as fear of flying persists. During the Hari Raya holidays the roads were choked because more people preferred to travel by road instead of flying, though the impact is lesser now,’’ says an industry official.

MAS has been on an overdrive to win customers following the MH370 and MH17 tragedies and is seen to be dropping fares, and since 80% of AirAsia X overlaps MAS’ network, it also lowered fares to stay in the competition, a strategy that has not bode well for the airline as the dropping of fares has been at the expense of yields.

AirAsia X’s yields fell 8% for the third quarter of 2014, though load factor for the period remained decent at 80%.

Officials feels AirAsia X has also been overly bullish about the Australian market, adding capacity to an overcrowded market.

The suggestion is for AirAsia X to cut its capacity to Australia by a quarter to half.

AirAsia X currently flies seven times weekly to Gold Coast, 14 times weekly each to Sydney, Melbourne and Perth and five times weekly to Adelaide.

They feel AirAsia X should axe Adelaide for now, cut back by half the flight frequency to Melbourne, Sydney and Perth given the over- capacity situation, and with fewer flights, the planes should be either parked, or better utilised by its Thai AirAsia X or Indonesia AirAsia X units, where demand is better than in Malaysia.

“This cutback in capacity is to mitigate the problem,’’ says an analyst.

As for China, the industry official suggested that AirAsia X suspend routes such as Xian and Chengdu for now and reduce the frequency on some of the other routes.

“Scale down on the bigger routes and knock off the smaller stations and in that way they can release the aircraft,’’ the expert says.

Affin Research believes that irrational competition could persist as MAS has yet to show signs that it will remove capacity from its longer-haul routes. If so, AirAsia X’s yields will remain compressed.

Raising fares is an option for AirAsia X, and industry officials believe the fares may be raised in the near term to as high as 25%, though drastic cost-cutting measures are more critical at this stage.

Source: The Star
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Re: AirAsia X

Postby sschong92 » Mon May 18, 2015 9:55 pm

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AirAsia X sees lower passenger volume in 1Q

KUALA LUMPUR (May 18): AirAsia X Bhd (AAX) ( Financial Dashboard), the long-haul low-cost affiliate of AirAsia Bhd ( Financial Dashboard), saw its passenger volume as measured by revenue passenger kilometres (RPK), decline 17% to 4.43 billion in the first quarter ended March 31, 2015 (1Q15), from 5.34 billion a year ago.

In a statement today, AAX (fundamental: N/A; valuation: N/A) attributed the drop in RPK to capacity management and slowdown in marketing activities during the first three months of this year, following Indonesia AirAsia flight 8501 crash in December last year.

RPK is a measure of the volume of passengers carried by the airline. It is derived from the number of passengers multiplied by the number of kilometres these passengers have flown.

“Available seat kilometres (ASK) capacity [had also] decreased by 3% to 6.02 billion in 1Q15 [from 6.22 billion a year ago], and consequently the load factor during the quarter had dropped 12 percentage points to 74% against 86% in 1Q14," AAX said.

ASK measures an airline’s passenger capacity, and is derived by the total seats flown multiplied by the number of kilometres flown.

In line with the airline’s turnaround strategy which includes network consolidation exercise for the first half of 2015, AAX said it had implemented frequency cut on certain routes in the beginning of year, mainly China and Australia, and had concurrently terminated loss-making routes such as Adelaide, Australia and Nagoya, Japan to optimise capacity.

The excess capacity from capacity management was re-deployed to short-term wet lease and charter operations to maximise revenue, it added.

Moving forward, AAX said its current booking trends are in line with expectations for a recovery in the second half of 2015.

In terms of fleet movement, the airline took delivery of two Airbus A330-300s on operating lease in 1Q15, bringing its total number of A330-300s to 25, compared with 19 a year ago.

On the performance of its associates, Thai AirAsia X registered strong loads of 82% for 1Q15, with 155,961 passengers carried, implying continued positive pick-up for popular routes between Thailand, Japan and South Korea.

Thai AirAsia X currently operates three A330-300s, while Indonesia AirAsia X has two A330-300s serving Bali-Taipei and Bali-Melbourne respectively.

AAX shares closed down 5% to 28.5 sen today, with a market capitalisation of RM1.2 billion.

Source:The Edge
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Re: AirAsia X

Postby behappyalways » Thu Aug 13, 2015 1:56 pm

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Re: AirAsia X

Postby behappyalways » Thu Aug 20, 2015 12:18 pm

Crude oil prices may drop below US$45, says Tony Fernandes
http://www.themalaysianinsider.com/busi ... -fernandes
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Re: AirAsia X

Postby winston » Wed Aug 24, 2016 7:01 am

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AirAsia X posts Q2 FY16 operating profit of RM20m

BY JOSEPH CHIN

Revenue from Australia increased 56% on-year on the back of higher passenger traffic while average base fare improved 15% on-year.


In the second quarter ended June 30, 2016, revenue rose 35.2% to RM883.16mil from RM653.03mil a year ago.

Underpinning the growth was a 71% on-year increase in scheduled flights revenue, due to stronger demand as the quarter ended with a 75% load factor, up seven percentage points on-year.


Source: The Star

http://www.thestar.com.my/business/busi ... -of-rm20m/
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