Yes, I come across a report that said KL-SG is one of the most profitability route. That's why Mas was complaining to gov when Airasia allowed to fly this route which was monopolised by MAS.

I don't know the credit crunch issue did hit Airasia or not. But last Monday, when Australia properties group, Centro said it had difficult to refinance its debt due to credit crunch did make a lot of portfolio managers staying alert on those high gearing company. I don't know this is conincidence with the Airasia recent plunge or not. Although high probably Airasia won't be affected as those planned bought planes had been financed properly before contract signed, just may be fund managers want to reduce some exposure.

To see whether company is able to repay loan, one should look at its cash flow statement/situation, not profit or through its P&L. P&L won' tell you this story/issue. Should look at its balance sheet and cashflow statement. Company can make tons of profit but ended with negative cashflow as well, bare in mind.

Based on chart, immediate support should be at 1.60 level. Strong support is seen at 1.40-1.45 level. Short term chart does show a downwards trend but posie to have some technical rebound due to oversold indicator.

Above information doesn't necessart correct. Don't mean to recommend to buy or sell. Judge your own.

Yes, running a business, the primary issue is to have a smooth and steady profitibility of the business, you don't speculate whether your raw materials price will go down or up. If it goes up, you pass on the cost as much as possible to your customers/consumers (I think for airliners they can through fuel surcharge, just my guess), if goes down, it is the same, either you earn more or pass the benefit to the consumers. Basically, the most important criteria is to have a steady profit margin
This kind of news will weight on the shares price for awhile unless oil price turns down significantly.

Technically, the 1.60 level immediate support line is breached, so next long term suppor would be at around 1.3x-1.40.

If one does hedge (it depends how much you hedge against, can be 100% can be 50% or 10%), then the movement in the crude price up or down doesn't affect you. You basically lock in the price already. So if AA does hedge and crude price come down significant, AA won't enjoy the lower price, whilst if price goes up, it is the other way.

But it is seldom for airliners to hedge fully, as fuel price cost can be always pass on to the consumers front through fuel sur-charge.

Fundamentally AA is strong, no doubt about it, but the recently news of 'playing or selling its fuel hedging' (it sell its hedging position and left company fuel price totally without hedge)' is dissapointing the real investors on the company.
As a company needs to do is focus and develop their businesses, not concentrate on the hedging and derivatives market. Hedging and derivatives product are meant for protection for its fuel cost, not for the company to make profit out of it or trade with it. That's why its shares plunged after this news come out.
But after clarify and buying new hedging on the fuel, it would take sometimes to restore some investors confidence on it.

Real investors will sell any stocks if there is some mis-management or earning issue on the company side and will keep track on company performance. Real investors do care the health of company being run so can't totally say real investors won't sell share because a single even happened. That's no a small event, it will affect the company finance situation if not manage properly.

Basically what AA can do is delivering good sterling performance of coming quarterly result then confidence will be restored and share price will go back up. As what matter most is the company earning result and health of financial situation.
Not meant to disagree, infact, at 1.50 might be a bargain buy.

Just my 2 cents.

This post has been edited by cherroy: Jan 31 2008, 08:56 AM