13 Jan 2012 AirAsia X Route Suspension Positive For AirAsia -OSK

13 Jan 2012  AirAsia X Route Suspension Positive For AirAsia -OSK

OSK Research says AirAsia X's move to terminate routes could be deemed positive for AirAsia (5099.KU)  "as passengers will turn away from the high airfares on long haul routes, leading to a shift in leisure travel to the cheaper low cost mid-short haul segment which AirAsia has exposure in."  Thursday, AirAsia's long-haul associate AirAsia X said it will terminate routes to Europe and parts of India, citing high jet fuel prices and weakening demand for air travel.  The move will also be positive for Malaysian Airline (3786.KU) as "competition from the only low cost carrier has been removed, thus allowing the national carrier to boost its yields."  The house rates AirAsia at Buy with a target of MYR4.57, while it rates Malaysian Air at Sell with a target of MYR1.12 as it remains skeptical of the national carrier's turnaround plan. AirAsia's stock is down 0.3% at MYR3.67, while Malaysian Air stock is unchanged at MYR1.62.