Well fundamentally AirAsia made the right choice switching to the more efficient A320 planes which saves a lot on fuel costs. But with the spiralling crude oil prices, the next quarter might see it lose some profit to it's higher operating costs which it managed to lower in the last quarter.

The decision by Tony Fernandes not to add fuel surcharge to their fare unlike other airlines who tend to pass the fuel costs to their customers, will likely mean AirAsia will either need to hedge against the rising fuel costs effectively OR lower it's costs even more while absorbing the higher fuel prices.

The future of AirAsia will likely lie on their international routes and the newly opened KL - SG route. Their local routes are probably not going to rise and fall as much since they are holding the majority of routes. With more flights to China and possibly to Europe, AirAsia's only way to survive is to grow as fast as possible and fly as cheap as they can.

In my opinion RM1.59 for a share in AirAsia is already a good price, as the market is being flooded by their substantial shareholder dumping their stock, it will probably go up again when the selling pressure stops. Last news shows that their oversea substantial shareholder dumped as much as 6 million shares to the market on the 18/12/07 while still holding about 137 million more.

AirAsia has almost RM4 billion in long term debts from purchasing all the planes. Mostly in US and Euro currency. As long as they are still making enough money to re-pay those loans, they aren't going bust anytime soon. AirAsia has been making profits since listed, and will probably make more if the oil prices stabilise.

There has been renewed selling pressure on AirAsia after a relief last week.

I believe Tony Fernandes once said he would never raised the fuel surcharge for his tickets, meaning to back up his word, he needs to somehow mitigate the fuel costs which is not passed to the customer.

Looks like AirAsia's fall has already stop so far and steadied at RM1.50. Looks like a stable position here, even EPF already started buying some more shares.

I got that under their news item, whenever substantial share holders change holdings, it will be posted as a announcement.