D7 = AirAsia X Long distance, journey longer than 4 hours, mostly use Airbus A330

AK = AirAsia, short distance, journey shorter than 4 hours, mostly use AirBus A320

I see.

If you are not familiar with the business, shouldn't touch the stocks.

Never did I mention I will touch AirAsia. I have no interest in it. Seriously. What la.

As for AAX, clearly it was a non investable stock from day one. I dare say so when I am a mere trader.

As for a AirAsia.

Quote: 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.

The problem with what you mentioned is that because AA adopted the asset light strategy of sale and leaseback, it doesn't have any feasible asset left (if you followed my arguments earlier). Its planes are sold to the lessors. So how could govt even consider giving such a loan guarantee?

And based on AA track record, it definitely does not deserve any bailout at all! That's my opinion and that's what I am stressing.
Got money from sale and leaseback, 5 billion plus, gave it all back as special dividend (a move which clearly benefited the big 2 shareholder!)

lolz..
I don't know want to pity or cry for your noobness...
bib boss @Boon3 knows in & out of AA & its business models..
that's why whenever he post. me look from afar

Gomen often issue guarantee for glc (without charging premium), is not unprecedented. AK is a viable business, after economy returned back to normal, it will generate tax, etc for the gomen.

Assets light mean higher return on capital employed, better for shareholders. it is normal for airlines to lease their fleet e.g. MH.

Special dividend was given to all AK shareholders, not limited to 2 shareholders only.

you and i may not like tf, doesn't mean AK is not worth saving.

If he is familiar with airlines business, he should knows iata code.

This post has been edited by icemanfx: Apr 7 2020, 05:27 PM

My focus is on AA and AA alone la. I am talking about the tree and not the forest and in this case, my issue is on AA.

That AA business was a business built on loans. Financially engineered from day one. Viable? Can loan growth go on forever and ever? Clearly, AA should be a classical business case study on how you can go bust if you over relied on loans.

And this wa how AA was forced to go the sale and leaseback. Read my past postings. At it worst, it had less than a billion in cash and over 12 billion in bank debts. How to carry on? Insane plane orders were placed AA were forced to the delivery schedule of new planes and it was up to its nose in debts. This forced them to do the sale and leaseback. This forced them to be at the mercy of many lessors. Now without their planes as asset collateral how can AA get the bank loans?

Now those 2 special loans. Read la my arguments. The markets knew it. Before the special dividends were paid, AA made an outrageous private placement. Now you know private placement tends to benefit the buyers of the placement shares. And the private placement was made just before the special dividends were paid. Who was the private placement investors? Tony and his sidekick.

Iata codes? Lol. Hey obviously I dunno those codes. Should I apologise?

AA has not much value except for its branding and goodwill.

Bad business - thin margin, capital intensive and burn through cash like no tomorrow.

And still owe mahb tax. That small amount against AA such big business also dont want to pay say alot about the business.

Any capital intensive company need borrowing to expand, no airlines buy aircraft with cash or 100% shareholders fund. sale and lease back is a way to reduce borrowing because lease is opex.

there is no doubt, those subscribed to private placement had a windfall from special dividend, sc should sanction them.

if you are unhappy with tf's or any major shareholders behaviour, should stay away from their companies, not that you don't have choice.

This post has been edited by icemanfx: Apr 7 2020, 05:58 PM

Well the problem is how AA went about it. It was already overburdened with debts and delivery of new planes. What did Tony do? AA had about 150+ new planes yet to be delivered. Huge debts. And what did he do? He placed a new order worth usd19 billion. Shit load of debts but yet buy new planes.

The next year Airbus made that usd50 million sponsorship to Tony's sports teams. Airbus as we know today was charged with bribery.

Put all this into context and chronicle order... with AA then doing the leaseback... and then the placement of shares... and then special dividends...

Should the country bailout this company, in which the top 2 shareholders stake is more than 60%?

Many aircraft ordered is option not firm, not all will be delivered and many will be for thailand, etc. popular aircraft like a320 lead time was >2 years and delivery could stretch over many years. it is normal for airlines to replace lease aircraft with own aircraft.

shareholders and company are separate entity. in some country, tf could be instructed to relinquish his executive power in exchange of loan guarantee.

if you are concern about ak debts, wait til you look at some property developers.

This post has been edited by icemanfx: Apr 7 2020, 06:13 PM

I wish to talk only AA and not AK and certainly not property developers.

By the way, I have pointed out that as per last qr, AA debts is relatively low. All the debts had been engineered to leases which stands at over 12 billion. Mind boggling.

This is typical of sell and lease back exercise. Nothing exceptional or abnormal.

Good night.

Instead of trading online, suggest you to have long lunch with some experience remisier and pick their brains.

I know the answer will be nobody knows.
But just based on your hunch. Do u think air asia will eventually get through this or rather will government allow it to fail.
Is air asia a buy at 0.81 now

AK is a viable company, was profitable and could be profitable after economy is returned back to normal, the gomen is likely to assist.

as i am not a tf's fan, i don't touch his stocks.

This post has been edited by icemanfx: Apr 7 2020, 10:42 PM

Im actually not a fan of his, but as a business entity, it is fine.
Without government help there is no way it will survive?
Anyway say 1 week later tf announces he forgot financial backing or that government is giving a so call soft loan, will the price then appreciate

Why should Govt help this private company? Wont it be a moral hazard issue?

Don't under estimate tf's connection, ak brand or his i.b. beside mys gomen soft loan or loan guarantee, tf could tap sovereign wealth funds.