See, in that article, he openly said the company has more than 2 billion in cash (which is correct but his definition of net cash is utterly wrong as loans and leases needs to be paid) but slyly he admitted his company needs cash.

Why?

That is the more important question.

And imo, it lies again on the company hedging which runs into billions.

1.Fuel hedging. He's got that terribly wrong. 11 million barrel plus as per qr report. Some reports said they were hedged at over 60. Oil price now? How much losses? And with planes not flying, these oil hedges will be a terrible problem.

2. Interest rate contracts runs into the billions. Has he gotten that right?

3. Currency hedges. Ringgit at one point strengthened very strongly against the dollar since the last qr. Then it tanked big time. Two massive swings during the period. Did he gambled correctly.

4. Audit Audit Audit. So huge amounts gambled in its hedging. Even the auditor raised concern. Do refer annual rpt. Me? Too little info and I feel AA is gambling and not hedging. That's my opinion.
Besides the hedging, the sale and lease issue. We know that most of the current cash pile came NOT from its operation but its financing. The sale of the planes raised most of the current cash pile. It's lease liability is now over 12 billion. This is insane. Gila betul.

With planes not flying, a lot of money will be needed to pay leases on planes not flying. Fastest way to burn cash....

And again there isn't much info is there? At what prices are they selling these planes. What was their purchase price. What are the leasing terms? If there is a delay or no payment, will AA be forced to default on their planes? Reports that AAX wa seeking deferrals of payment in Feb 2020 and it was noted that not all lessor will agree.

And yeah, with most planes being sold, how can AirAsia get loan from bank? Not much asset left to pledge mah...

Which is why Tony openly pleads the govt to lend them money.

What a blardy joke. The govt is not a bank la

Anyway, should govt even lend money to a company whose planes are already sold.. income almost gone.... now if the virus situation persist a couple more months and mco persist...how will AirAsia get income?  Even when the situation improve, how many will even dare to fly? Won't they be weary? If so even when AA flies again, won't ticket sales be down?

"No problem, I have cash. But I need a loan, on good terms."

So in short you have a problem la.

The airline declared a record special dividend of 90 sen a share in May last year after it sold its 25 aircraft to US-based private investment firm Castlelake LP for US$768mil (RM3.22bil).

Back in March 2018, it entered into a sales and leaseback arrangement with BBAM Ltd Partnership involving 79 aircraft and 14 aircraft engines, of which AirAsia received US$1.19bil (RM4.62bil).

There was another special dividend of 40 sen declared for the third quarter of 2018, on top of the interim dividends of 12 sen each for the first and fourth quarters.

Just from the two years, shareholders have pocketed RM5.15bil in dividends.

hahaha.......

how come no one is selling?

Berkshire Hathaway sells part of Delta, Southwest stakes

sos

AA , AAX  ?

If you read in between the lines it's just a blardy a joke of company. Lapsap!

It actually had a shit load of a money when it started its sales and leaseback program. But instead of putting the money to good use, it decided to splash it all away by giving free money via special dividends.

Now it wants a loan from govt? Lol. What assets does AA have left?

“The government should also bear in mind that its main policy objectives should be to maintain essential air connectivity (most notably public service obligation routes) and protect vulnerable parties such as the 50,000 employees in the aviation sector and Malaysian consumers, rather than propping up the commercial performance of airlines,” it said.
https://www.freemalaysiatoday.com/category/...rt-says-mavcom/

we will see what we will see.

the vultures are always preying on the weak.

hard to tell how the "power people" view this.
mind u, it's not just mas and aa... there is proton, trains, buses, et al... not that we haven't seen it before.

always the question - where is the money coming from?!

but for MAS, before Covid19, Khazanah already said they need to let go by year end 2020.

Looks like it's not gonna happen.

See, in that article, he openly said the company has more than 2 billion in cash (which is correct but his definition of net cash is utterly wrong as loans and leases needs to be paid) but slyly he admitted his company needs cash.

Why?

That is the more important question.

And imo, it lies again on the company hedging which runs into billions.

1.Fuel hedging. He's got that terribly wrong. 11 million barrel plus as per qr report. Some reports said they were hedged at over 60. Oil price now? How much losses? And with planes not flying, these oil hedges will be a terrible problem.

2. Interest rate contracts runs into the billions. Has he gotten that right?

3. Currency hedges. Ringgit at one point strengthened very strongly against the dollar since the last qr. Then it tanked big time. Two massive swings during the period. Did he gambled correctly.

4. Audit Audit Audit. So huge amounts gambled in its hedging. Even the auditor raised concern. Do refer annual rpt. Me? Too little info and I feel AA is gambling and not hedging. That's my opinion.
Besides the hedging, the sale and lease issue. We know that most of the current cash pile came NOT from its operation but its financing. The sale of the planes raised most of the current cash pile. It's lease liability is now over 12 billion. This is insane. Gila betul.

With planes not flying, a lot of money will be needed to pay leases on planes not flying. Fastest way to burn cash....

And again there isn't much info is there? At what prices are they selling these planes. What was their purchase price. What are the leasing terms? If there is a delay or no payment, will AA be forced to default on their planes? Reports that AAX wa seeking deferrals of payment in Feb 2020 and it was noted that not all lessor will agree.

And yeah, with most planes being sold, how can AirAsia get loan from bank? Not much asset left to pledge mah...

Which is why Tony openly pleads the govt to lend them money.

What a blardy joke. The govt is not a bank la

Anyway, should govt even lend money to a company whose planes are already sold.. income almost gone.... now if the virus situation persist a couple more months and mco persist...how will AirAsia get income?  Even when the situation improve, how many will even dare to fly? Won't they be weary? If so even when AA flies again, won't ticket sales be down?

“We estimate that AAGB’s total monthly cash burn rate may be around RM527 million, with (1) fixed cash operating costs of RM192 million/month, after assuming a 32% cut to the run rate of RM283 million/month in FY19; (2) cash costs for operating lease instalments and financing expenses of RM258 million/month; and (3) fuel hedging losses of RM77 million/month, using US$35/bbl Brent as the average spot price for the rest of the year.

AK need moratorium from aircrafts lessor else could run out of cash. Hence, critical to borrow from banks with gomen guaranteed.

Take a look at AAX instead. They had already tried asking for deferrals...

https://www.flightglobal.com/strategy/airas.../136882.article



As you can see, AAX has a number of lessors... and as you can read from the article, not everyone will agree. If I am the lessor, I would think its wise to just sell the planes....

Borrow from banks with govt guarantee? Interesting but would you, the rakyat be happy that govt is helping a company which TF and his sidekick owns more than 60%? Bailout of 2 who was accused of taking a 50 million bribe? You ok with this? I am not.

D7 business model is not financially feasible, won't be profitable for next few years. It is better to allow it to fold.

Gomen could charge a premium for its guarantee like insurance company. AK is still liable to banks, is not a bailout or free money like to MH.