Understanding the business model helps. long post...................................... Many years ago.... Everyone knows that AA model is one that builds on leverage. Using other people money to build your dream. What a dream world. And that is what Tony did. He build up AirAsia from scratch with the massive help of borrowings. As everyone knows... You cannot borrow and borrow forever..... and that's when Tony got into trouble few years ago.... With debts reaching 8 billion (or so ... cannot remember precisely) ..... and with the influx of more planes... and with sales revenue not growing as fast as its debts..... something had to give..... Tony were forced to give the order to ask deferment of airplane delivery.... that slowed the borrowings down ( new planes equals many millions of new debt)... and it worked.... ..... and you can see clearly how AirAsia became a darling of many traders in late 2010.... (* its not whether you love or hate the industry but the need to understand what's happening *) Can you see how much the stock rise? Look chart...... and as you can see also in the chart.... AirAsia then started falling again in 2011.... After crawling out of the gates of hell of its debts problem... which was caused by the fact that AirAsia could not possibly take in so many new orders of airplanes..... AirAsia did the dumb dumb thing once more... Arrogance I think.... AirAsia in 2011 announced it ordered 200 new planes... worth over 50 billion ringgit.... so dumbfounding... cos the old airplanes order.... AirAsia was already having trouble digesting.... that order...iif I would recall.... forced AirAsia to carry a capital commitment to buy new airplanes to be worth around 70+ billion. Here was a company.... less than a billion cash... carrying close to 10 billion in loans... taking a new order, increasing the future airplanes purchase to over 70+ billion........ how to survive? And that's why the stock tumbled... and tumbled.... RECENTLY.... what changed? SALE and LEASEBACK! Yup.... survival tactics..... selling own plane and then leasing back. (makes one wonder...consider that AirAsia still has more than a hundred new planes to take delivery!) this is where I don't understand... cos I am not smart enough to be an accountant... There is lease income... and also lease expense... for example... lease income this Q is 322 million (see note 10) (see how big a booster it was to the sales revenue?) and then there's lease expense.... 111 million (income statement) .... err.... err ....... (* I wish AirAsia was more transparent and give more details in its leasing. There is major money involved here!) and then ..... borrowings went down a lot (thanks to the planes sold)..... and also ... this year.... in Feb.... AirAsia again were forced to eat humble pie... and asked Airbus to postpone delivery of 7 new airplanes. ( which begs again... why did Tony give that freaking order of 50 billion new airplanes back in 2011? Old order still got, order new one for what F***? ) and boom.... the balance sheet of AirAsia got a whole lot better..... can this sustain? in the short short term..... probably yes. .... until..... airbus starts asking Tony about when he will take delivery of the new airplanes!) and the stock chart.....