The engineering of debts can be seen from day one.

Anyway, the pn17 news is not new. Liabilities had been greater than its assets for quite some time. Yup. Bursa had given them a grace period since June 2020.

Yes. Can be read either from its Quarterly Reports or Annusl reports.

I see. Thank you Boon3

And yes... whenever you read anything (be it social media, your closest friend/relative, your bosses or even news media, it pays to verify what you have read )

I made the point that AA was built on debts...

Well one can verify that statement by checking either the QR or the annual reports. Let's do it via the QR...

Not the best but for simplicity sake, I just use each year 4th QR.... and my focus is on cash, total borrowings, capital commitment for new planes

2008

https://www.malaysiastock.biz/GetReport.asp...-Dec%202008.pdf

Cash 593 million
Total loans 6.69 Billion
Capital commitment 24.86 billion

==>> Right from the start... net debt in loans is about 6 billion. Owe ppl 6 billion but wants to buy 24 billion worth of new planes...

2009

https://www.malaysiastock.biz/GetReport.asp...02009_FINAL.pdf

Cash 747 million
Total loans 7.593 Billion
Capital commitment 24.6 billion

==> debts increased

okay? ..... fast forward.... lazy sikit

2015

https://www.malaysiastock.biz/GetReport.asp...%2026%20Feb.pdf

Cash 1.3 Billion
Total loans 12.7 Billion
Capital commitment 66.296 billion

===> see how the company gets deeper in debts?

fast forward... 2017...

https://www.malaysiastock.biz/GetReport.asp...Feb18_Final.pdf

Cash 1.8 Billion
Total loans 9.3 Billion
Capital commitment 89.8 billion

===> company had started selling and leasing back its planes...

fast forward lastest QR

https://www.malaysiastock.biz/GetReport.asp...021%20Final.pdf

Cash 400.7 million
Total loans 1.2 Billion
Capital commitment 97.3 billion
Lease liabilities 13.9 Billion



and there you have.... since 2008.... what really has AA achieved?

when you line up the data, preferably in ur own worksheet, it's much easier to see what's happening.... and all this is the company own doing.


and yes, on hedging... run thru the QRs the same way... you can see how AA took on way too much hedging risk (yes, business hedging is always good but whatever's good can turn bad if one over do it) and you can also see, throughout its history, go see how much hedging losses has AA suffered .....

Due to capital intensive and highly depreciated assets, it is normal for airlines to build on debts even well run airlines like sq. how debts is managed is another debts.

info on PN17

https://asklisting.bursamalaysia.com:8443/M...ticeNote17.aspx

You are welcome.

The condensed income statement is useful too!

https://www.malaysiastock.biz/GetReport.asp...021%20Final.pdf



As you can see, the big ticket items ...

1. Depreciation of right of use asset = 416m per quarter
2. Lease liabilities = 115m per quarter
3. Finance costs = 50m per quarter

and yeah... staff cost ~ 120 million per quarter...

Yea... if I do a simple rough count, that's close to 700m per quarter.

and the Aviation revenue was only 118m.... even if Aviation revenue increases 3 fold, revenue will only be around 450 million...



As you can see, it's a long way off now for AA to even register a profit.... and TIME is never a friend of a lousy business....
the leased airplanes will depreciate more as time passes.....
the shelf live tioo.......


yup...... AA will have to take in new planes in the future too, but how? Which sky will the money drop from? Borrow again?



This post has been edited by Boon3: Jan 15 2022, 12:52 PM

Here's an old posting of mine in 2016....

==================================================

http://www.theedgemarkets.com/my/article/a...imb-ib-research

In his note to investors today, Yap said investors have generally been cautious on the potential orders, fearing that AirAsia is once again over-expanding.
"Investors did not like the additional 100 orders which come at a list price of US$125.7 million each, as they come on top of the undelivered 304 A320neo orders," he said.


:x

304 belum deliver...
Order 100 lagi.....


LOL

How to write the word DIE ah?

source: posting #83

==================================================

See how AA backorder of new airplanes got so big?

AA went into a buying orgy during those years (and of course later we also found out about the Airbus bribery scandal) .....

Backorder of 304 airplanes undelivered... and AA went to order another 100 new ones.... !!!!!


This is hole that AA dug itself. Covid only exposed it!

Depreciation is non cash and is before EBITDA.

just curious, what do you mean by air asia business is sustainable and financially feasible post covid?

Airlines has always been a lousy business. What's worst is an airlines with a lousy management.

If A was sustainable, why on earth did it embark on a wholesale sales and leaseback program?

hence my question to icemanfx

anyway, just for chatting sake... post#124, the posting with all the QR links...

This part was the most important part.....

2015

https://www.malaysiastock.biz/GetReport.asp...%2026%20Feb.pdf

Cash 1.3 Billion
Total loans 12.7 Billion
Capital commitment 66.296 billion

===========

here's why....

Yes, the cash of 1.3 Billion vs 12.7 billion in loans showed how unstainable the company was...
choking with the delivery of new air planes ....
debts up to its neck......
how to take on new loans?

survival was really an issue then!!!

And ironically, 2015 was when AirAsia started embarking on its sale and leaseback of its airplanes......

rest really was history....


the weakness back then... so easy to spot in 2016 (my old postings are still out there .... somewhere... )




anyway.... the bottom line today is still the fact that liabilities is more than assets..... ie... INSOLVENCY!!!


and not helping at all, air travel is still very much limited.....

This post has been edited by Boon3: Jan 15 2022, 06:33 PM

I thought of this as well.

I thought is normal for Airlines to be built with debt, but from the figures, seems like AA has been overly expanded. TF may have made wrong judgements and overly confident

Most saw and look at AirAsia based on how big the company was growing. They see the new planes, the expansion and most ppl assumed that the company is doing good.
But all that was achieved was achieved via borrowing. Yup the house was built on debt.

Hence, here we are.

The house of debts has been terribly exposed.


And the weakness is there and will continue to be there unless the management wakes up and address they key issue itself.

So from your last sentence, I will assume that AA can still be saved even been laden with such a big debts. Hopefully can see them rebound

'And the weakness is there and will continue to be there unless the management wakes up and address they key issue itself.'

Look the lease liabilities at 13.9 billion is way too insane.

The back order of new planes at close to 100 billion, that's even worst.

The leased air planes... is getting older by the day. This issue is huge!

The company really needs to understand how to control it's hedging. During the early years, the company lost more than 500 million in hedging... and here we are.... the company recent hedging losses is even worst!

Yup... can the company address all this?

Maybe in 20 years?

Still can wait?


Factually is no hope.

Miracles may happen tho

This post has been edited by HumbleBF: Jan 15 2022, 08:01 PM

And also, will the company acknowledge that...

1. They were wrong to place the orders for so many planes?
2. They were wrong to distribute the bulk of the money they raised from their sale and leaseback?
3. They were wrong to issue a special placement of shares to the 2 big boss, just b4 they gave out the money stated in (2)

I wonder......

Without huge airplanes order, couldn't justify for airbus to sponsor tf F1 racing team.

big fish eat small fish, typical in the food chain. What fascinated me are those minions promoting recovery without considering pn17 status.

This post has been edited by icemanfx: Jan 16 2022, 09:40 AM