AirAsia May Become SIA's Biggest Threat - Citi

04 Sep 2012

Singapore Airlines (C6L.SG) may be moving forward, but it's staying still, Citigroup says.  Product upgrades may help SIA maintain its premium-service offering, but competing airlines have caught up fast since its last major cabin overhaul five years ago, it says.   "SIA's product upgrades may be viewed as overdue and necessarily defensive in light of recent competition." It adds, competition in SilkAir's space is also heating up, with many Asian airlines also targeting the short-haul market with an upgraded, similar product.  AirAsia (5099.KU) may become SIA's biggest threat, it says. "AirAsia may develop a very strong regional network that SIA/SilkAir may not match (and over a much lower cost base)."  The operating environment has also deteriorated further, with continued economic uncertainty weakening Asean airlines' pricing power, it says. "SIA stands at the intersection of strong headwinds buffeting Asian airlines, yet its strategic response lacks coordination and may be ineffective. SIA's ROE may be structurally lower, and current valuations do not look justified." It keeps a Sell call with S$9.40 target. The stock is up 0.5% at S$10.65.

AirAsia CEO Says Thai, Indonesia Units To Launch IPOs By Second Quarter

13 Feb 2012 13:01

--AirAsia chief executive says Thai and Indonesia units to launch IPO by the second quarter --Thai unit likely to file an application for listing this week ( SINGAPORE --Malaysian budget carrier AirAsia Bhd. (5099.KU) plans to list its units in Thailand and Indonesia by the second quarter of this year, its chief executive said Monday, in a move that will help the budget carrier raise cash to expand its operations. AirAsia Chief Executive Tony Fernandes said in an interview with Dow Jones Newswires that the Thai unit will file an application this week for a listing on the stock exchange of Thailand sometime in the first quarter, while Indonesia AirAsia plans to complete its listing in Jakarta in the second quarter. The executive didn't say how much the company aims to raise from the IPOs. "I think it's a good time to (do an) IPO," Fernandes said. "The markets are good and the interest is there." Fernandes' comments come as markets across Asia have rallied since the beginning of this year after volatility in 2011 that led to the cancellation or postponement of major initial public offerings. For instance, U.K. soccer club Manchester United delayed plans for a US$1 billion Singapore stock offering, while Malaysia's Axis Global Islamic REIT had pushed back a possible US$650 million listing in Kuala Lumpur, according to people familiar with the matter. Fernandes is also hopeful that AirAsia X, the long-haul low-cost carrier unit of Southeast Asia's largest budget airline by fleet size, would launch its IPO in Malaysia this year. "I think we have dealt with the issues that delayed the (AirAsia X) IPO" by shedding its European routes and securing route rights to Sydney, said Fernandes. Like many airlines, AirAsia has been struggling with high fuel costs and slowing demand. The company reported a 53% slump in its third-quarter net profit to MYR152.3 million, primarily due to higher fuel expenses, while its AirAsia X unit recently said it will end flights to Europe and India by March amid weak demand and rising costs. Fernandes also reported progress in AirAsia's recent joint ventures, noting that AirAsia Philippines is scheduled to start flights in March, while AirAsia Japan--a joint venture with All Nippon Airways--is due to launch operations in August after securing official certification last week. Besides a potential listing, AirAsia X is also likely to introduce new routes this year, adding to its first-mover advantage that could help it fend off competition from Singapore Airlines Ltd.'s (C6L.SG) new long-haul budget carrier unit Scoot, Fernandes said

AirAsia X Boosts Australia Services After Europe Cuts

17 Jan 2012 AirAsia X Boosts Australia Services After Europe Cuts

SYDNEY (AFP)--Asian budget airline AirAsia X said Tuesday it would start flying daily services to Sydney from Kuala Lumpur, barely a week after announcing a suspension of flights to Paris and London. The Malaysia-based airline said it would start its Sydney services from April 1--its fourth Australian destination after Gold Coast, Melbourne and Perth. "Australia is a key market for AirAsia X and the Sydney route has long been a priority due to strong demand from travelers across the globe, especially Asia," said Chief Executive Azran Osman-Rani. AirAsia X, the long-haul offshoot of Asia's largest budget airline, AirAsia Bhd. (5099.KU), has been pushing to fly into Sydney for four years. The announcement came a week after it cited global economic uncertainty, soaring taxes and higher jet fuel prices for a decision to cut Europe flights and routes to India. New South Wales Tourism Minister George Souris said the new service would bring about 55,000 more international visitors to the state each year.  "This daily service will inject nearly A$138 million (US$143 million) into NSW every year and is another great step towards the NSW government's goal of doubling overnight tourism expenditure by 2020," Souris said.

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.

OSK Optimistic On AirAsia's 2012 Outlook; Keeps Buy

29 Dec 2011

OSK Research says it remains optimistic on AirAsia's (5099.KU) 2012 outlook as the low-cost carrier is expected to capitalize on its new hubs in Manila and Tokyo.  "Elsewhere, it will also get an earnings boost from its fruitful AirAsia Expedia JV tie-up and from monetizing its training academy," the house adds.  It also says, in view of the lower jet fuel prices, "we expect the airline's bottomline to expand by 21% in FY12."  It maintains a Buy rating on the stock, with a price target of MYR4.57 and says the stock is at an attractive 5% discount to its FY12 P/E of 9.6X. AirAsia is down 0.5% at MYR3.73.

Wednesday, 30 Nov 2011. AIRASIA – Stock Pick

AIRASIA ( 5099 : 3.66 ) : Targeting 3.90
Description
Resistance : 3.90
Support : 3.50
RSI of 49
RSI is on an upkick
STOCHASTIC
It is turning upwards
TREND INDICATOR
Down
Comment
Following the recent low of 3.45, it appears to be developing a positive Right angle triangle, with a measured
move to 3.90
Trading Strategy
Buy. Stop loss is at 3.50

AirAsia May Fall After Below-View 3Q Results

AirAsia (5099.KU) may reverse Tuesday's gains after its 3Q results came in much below expectations. 

The airline said Tuesday 3Q net profit fell 53% on year to MYR152.3 million from MYR327.3 million primarily due to higher fuel expenses although revenue was up 9.9% at MYR1.08 billion from MYR979.7 million helped by an 8% rise in passenger numbers. 

Analysts say the results are substantially below market expectations with nine-months net profit accounting for only about 52% of consensus estimate of MYR814 million for FY11. The stock ended Tuesday up 0.3% at MYR3.67 ahead of the results.