Put la the link....

https://www.theedgemarkets.com/article/fern...ll-be-best-year

Your memory pretty damn good la...no wonder he has left the building....

http://www.businessinsider.my/tony-fernand...sts-of-2019/amp

Some places got plenty of sifu one...

Kung Fu movies also a lot of sifu......

Strong cash flow? Omg. Lol. I guess the proceed from disposal of airplanes under their ingenious sale and leaseback engineering is considered strong cash flow. Hohoho...

Technically no since MOST airlines hedge their oil requirements.

In a normal business sense hedging is OK but on the other hand, some abuses it and uses hedges as a form of betting.

Airasia current fuel hedges amounts to 14.8 million barrels. Ahem. This info can be found in their qr report. As a gauge, go run thru this figure and compare previous years amount and one can have a fair assessment if Airasia is over hedging or not....

So anyway this 14.8 million barrels is already hedged at X price. And Airasia said "For the year 2020 and 2021, Brent swaps represents up to 73% and 20% of the Group’s total budgeted fuel consumption each of the years respectively."

Now fuel prices has crashed. Prices already hedged at a higher prices. How to untung? Err.. Keep buying fuel hedges? What if fuel continues to fall? Airasia cash flow so good meh?

Continue...

https://www.theedgemarkets.com/article/aira...all-fuel-hedges

That's an old article... but interesting points to note...

1.He added that at US$50 per barrel, it would have to incur a total of US$481 million of fuel-hedging losses. - so said Ah Tony back then. Also see how it said it wanted to come clen with its hedges back then?

Anyway atm, oil has just down the same. It has plunged... So would the plunge in oil helped AirAsia? It would ONLY if Airasia bought spot prices of the oil.

2. Read the part about credit interest rates swaps...

Current hedged amount as per latest qr shows 1.8Bilion.
LOL. A lot of money hedged, yes?

And rates have come down hard... but again for Airasia it had already hedged at a higher price.....

See the other posting....

Ps... you can change your hedge if you unwind your existing hedges... which means millions of losses.

Not as straight forward since currently it's disposal of planes in its sale and leaseback program is helping to cushion its financial.

Point is, if flights are cancelled left right center... losses will be mega huge.

Last crash was from 90+ to fifty... and the said losses was around 480 million. (spare change???)

This time... how?

Wah! Airasia panda leh. Hedged cheaper than KLM.....

Did you understand how AirAsia was able to give out dividends?

Exactly. Sometimes if one takes the stock out of the equation, they will then understand if the stock is worth bothering....

For me, I always ask the simple question...

How was Airasia able to pay big dividends not too long ago?

Well, they already decided they needed the sales and leaseback. Debts gearing was way too big already. Unsustainable. Esp when you have less than 1 billion cash and carry more than 12 billion bank borrowings. New planes are coming in regularly (that 19us billion plane order). Ticket sales are simply not growing fast enough. So sales and leaseback was needed.

They then created a wholly owned subsidiary to handle the leaseback, called AAC.

So AAC but the planes and leaseback to their parent company, Airasia.

So voila. Airasia became rich by selling own planes and leasing back own planes. How rich? Was it 1 billion?

And they then got some company to buy this leasing company. LMAO!!

So Airasia got millions and millions and millions to give back to shareholder.

They needed the money cause too much bank borrowings. Instead of trying to lower the debts and improve their balance sheet, they gave out millions and millions in dividends.

Wait. The curveball was the previous year(s), Airasia did a cash call but that cash call (private placement of shares) as offered to only Tony and his partner.

Thinking about it. It was genius. Share placement to its big boss. Subsequently big dividend was given out. I think it was genius. You say?


Yes, the brand Airasia is there. Cheap flights are good. Who doesn't love cheap flights? But since there exist so many other stocks why should I bother trading the stock that carries so much questionable issues?

This post has been edited by Boon3: Mar 13 2020, 11:56 AM

How true!!

They anchored their believes based on what they witnessed. All full Airasia flights. Every place they visit, all they see is Airasia...... they simply ignore to peep into Airasia drawer and realise that it might be a house of paper airplanes!!

Flights cancelled. Dwindling passengers.

And then you have the many fundamental issues about the company.

Stocks worldwide has corrected substantially.

Simple question is why need to bet on this stock?

My opinion(S) on all Airasia issues can be found all over the forum. I had been consistently critical against the way the company had been run. It's a sham. A company built on credit cannot be sustained.

A house of paper airplane.

Well exactly. The facts are all there that the company financial engineering is not gonna last. Many questionable issues. The incredible intercompany transactions. The layers and the layers of it. The integrity issue of the boss. The hedging issues which highlighted the boss tendency to bet rather than to hedge.

Problem is once the issue of stock price is factored in most issues are usually ignored.....

Obviously the biggest risk right now is....... Airasia needing funding and Airasia decides to go the rights issue way.

Rights issue is always deadly to the unsuspecting 'investor'.

One can easily invest say 20k into the stock.
But if Airasia decides a rights issue, the investor is forced to dump some X amount of extra money into the stock. A 20k investment can easily double into a 40k investment. If the investor has that extra 20k to pay for the rights issue, ok. But what if the investor don't have or doesn't want to?

Yeah, the investor could salvage by selling the rights to the rights issue to salvage back some cash. But huge losses will occur once the newer shares are listed....


With most planes being already pawned for leasing... I would not discount this.

Beware!!

This post has been edited by Boon3: Mar 19 2020, 03:55 PM

Berkshire bought those shares in Feb 2020. It's an additional purchase. So it's not the same as saying he just bought.

Furthermore, let's not forget this investment has lost more than 60%.

And let's not forget that Berkshire has it's fair share of bad investments mistakes.

Make no mistake the next 2 quarters should be really painful for Airasia. We are now adding in of at least 2 weeks of shutdown. Can you imagine how badly the sales will be?

Furthermore, once thd lock down is lifted, how many will be as gung ho to fly here and there. If a kind soul would give you free air tickets to Rome next month, would you dare to go?

No no no.

You HAVE to put into context that this special dividend was paid out right after AA allowed Tony to subscribe to a special placement of shares.

https://www.theedgemarkets.com/article/aira...or-shareholders

That was 2017.

2018. Special dividend 40 sen.
2019. Special dividend 90 sen.

LOL. Who benefited more?

And those dividend money came from where?

Got to be careful... plus it's always not a good idea to follow.
Try to develop your own game plan.