AIRASIA seem coming back, after oil price going down, and US currency might go dowm further

Just wondering , Airasia are not paying any dividend due to further expansion , why big investor such as EPF still want to invest on it ?

EPF will get nothing per annual if they keep the stock . Is they playing speculation ? They earn by buy at low price and sell at high price in future ?

Maybe EPF got linked with Air Asia so at the time when the share price for Air Asia plummeted, EPF move in to assit. hahaha just guessing.

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Added on September 30, 2008, 1:37 pmAir Asia didn't went down below RM1.00 though a lot of news saying Air Asia having financial problem and reducing numbers of employees.

Price quoted currently is RM1.25. With the amounts of debt that are quite substancial, Air Asia maybe facing difficulty in clearing the debt in future.

This post has been edited by Yahoo8888: Sep 30 2008, 01:37 PM

Agence France-Presse - 10/4/2008 8:31 AM GMT
Malaysia's AirAsia may be taken private as industry slows
AirAsia, the region's largest low-cost carrier, said Saturday it is exploring "various options", following a newspaper report that it may soon be privatised.

"We have continuously been exploring various options at both shareholders and company level," Kamarudin Meranum, group deputy chief executive officer told AFP.

"There is nothing to confirm at the moment," he said in response to the report in business newspaper The Edge.



What will happen to AirAsia share if it's going to be privatised ??

you got to see whether it is possible or not ler.. Currently Air Asia free float is about 60%. If they really want to privatized it they need to pay quite a hefty amount to privatized it..Some more the debts to equity ratio for this counter is more than 2 times which makes it impossible to be privatized...If you said being take over also not so easy as they need to pay at higher than market price in order for them to take over...

This post has been edited by darkknight81: Oct 5 2008, 12:12 AM

Cannot be lah... where the hell they are going to get that kind of money to privatize it? The major shareholder is rich but not until that extend...

they just want to prop up the share price lah.

I really amused to see the news of the company say its share is not reflecting the real valuation. I think market has already price Airasia at normal reason, my opinion only.

Several negative factors that looming on this stock currently are:

1. Lastest quarterly result is lackluster. Pre-tax in red.

2. It didn't give any dividend at all.

3. With likelyhood economy will be slowdown significantly, people worry of its loading factor will continue to drop as more and more plane being delivered.

4. Highly gearing especially at current global credit crisis which those high gearing stocks will be seen as high risk.

Positive factor is oil is dropping fast.

Actually for current market condition, if one wants its share to reflect true value, Give Generous Dividend! based on profit, as simple as that.

I think there is some culprite behind want to disclose fake news ... Want to trap those who are greedy to buy... Maybe the major shareholder are going to let go their share So that they can sell their share at higher price to those stupid speculator i will not consider this stock even it drops below 60 sen what to say at current price... What is the logic to privatize a company which is full of debts?? Y tony cannot be contacted?

Air Asia is rather risky stock due to their business model of high leverage, but the cash flow still holding ok, at least until last quarter. They aimed to be those type of high risk, high return type of company, so not to expect any dividend from them in near future.

Global trend at the moment is, government won't let big company fail as that might have deep impact to the economy as a whole, guess our government won't let them fail as customers are generally happy with their existent (as compare to the time we only have MAS to fly us in the country), but from shareholders this company just sucks (they have to as they will not able to service their loan and declare dividend at the same time, they will collapse). Buy small small and wait for couple of years, if it not doing badly you might see significant growth. Let's hope to see their planes fill in the LCCT in future.

Q3'08 should see their operating profit return to black, but I really don't like the way they book tax credit as earning (that might be perfectly all right in Accounting Standard), as the money wasn't earned (as yet). God bless us and Air Asia.

"Air Asia is rather risky stock due to their business model of high leverage "

I dont follow this stock and dont know deeply enough their "business model". Why you say so, they are high leverage ?? can elaborate more ?? is it that their borrowing is at huge sum ? or their business leverage on the oil price movement ?? mind to share more ?

I think their business plan is to develop a comprehensive regional network as soon as possible, by acquiring large quantity of planes on credit.

From the financial statement, we can see the depreciation and non-current asset grow in pace, so do the turnover. The company will remain as going concern as long as they are able to meet the installment of loan with cash flow they receive from us. And they are not seeking a lump sum of debt when they sign the S&P for plane purchase but doing that in stage. I think some of the loan (if not all) are link to LIBOR and current LIBOR fluctuation might stress their earning later on. So far (until Q2'08), the cash flow is still healthy but if they don't grow, they're doomed. Think they are trying to secure a loan for the next batch of planes to be deliver at the moment (maybe news of privatization helps in share price, in turn help to secure better loan package).

If I am not mistaken, they still showing smaller operating profit (but red after foreign exchange loss, I normally ignore that if the money is mean for longer term).

What worrying me more is their loss making foreign subsidiaries (Thai & Indo), the two had not showing convincing result since established (recent saga in Bangkok making their Thai business worse). But look at the bright side, their competitors start to close shop liao (1 2 Go, Adam Air...). Hope they are not the next to get folded

Start from 3O'08 they no longer hedge their oil requirement, that's mixed of blessing for them, as oil price puncture in 3Q (but before puncture, they was seems like going to collapse every minute ).

The information might not be correct and that's just base on my memory, I read their F.S. couple of weeks ago, hopefully my memory not corrupt and this is useful for some of us. Invest on your own risk vested...

why do AA get this tax credit... I see it in many Quarters.can u help to enlighten us..

Tax credit mainly arise from company expenses & capital allowance (tax based depreciation), but AA's tax credit mainly due to government incentive (on capital allowance, I guess). To me, tax credit is nothing unless you have profit to set it off.

THE NEWS confirmed that the acquisition is a bullshits talks...

As been mentioned above, the debts to equity ratio for tis counter is hefty and at the same time the interest from the debts would also increase and tis will bring the excess in the PBIT. Soon if the debts are not well managed, the company might go insolvency.

As for the recent news to go for privatized, maybe it is their tactic to gain confidence from the public to buy more shares of AA as been mentioned that AA free float is about 60%.

AA to purchase 174 planes should also be one of their major flaw as a substancial of money wil be infuse to tis vast project. With the current sentiment that is faltering of economy, the numbers of passengers definitely would not be as good as before.

What i am thinking is people will most probably go for speculating for tis stock. Once gain and left immediately.

Just my 2 sen.

AA won best asia LCC for 2nd year.


This post has been edited by asambuffett: Oct 14 2008, 08:53 AM

buying AA is a high risk investment...AA with heavy debt due expand with order 175 airbus coming in by 2012/2013..
If AA can survival within 5 year now,it will become good airline shares..otherwise turn into another GLC...

As AA having the news that might go for privatisation, will tis ease the company pain ?

AirAsia set to close deal on purchase of 37 planes

PETALING JAYA: As airlines globally struggle to get financing for future aircraft deliveries, AirAsia Bhd says it is close to finalising a deal worth close to RM3.5bil to fund the purchase of 37 new aircraft over the next two years.

Deputy group chief executive officer Datuk Kamarudin Meranun told StarBiz yesterday the airline had given Barclays Capital and BNP Paribas the mandate for the financing.

“It is an ECA-backed (export credit agencies) financing that would fund the next 37 aircraft for which delivery will begin on Dec 19,’’ he said.

“So far discussions have been held with ECA in Paris and we are now going through the documentation process. We hope to sign the financing agreement before the first delivery,’’ he added.

Asked about the borrowing rates, he said they “are very attractive.’’

AirAsia has ordered 175 aircraft with 50 under option. This year the low-cost carrier will take delivery of four more aircraft, followed by 14 next year and 23 in 2010.

AirAsia had debts of RM4.3bil as at end-June and cash reserves of RM1.1bil. The carrier’s net gearing is 1.9 times and analysts expect its gearing ratio to rise with the additional borrowings for the new deliveries.

The airline, which abolished its fuel surcharges on Tuesday, hopes to rev up revenue by selling more seats.

Market talk is that AirAsia, since abolishing its fuel levy, has raised its administrative fees by RM30 to RM70 one-way. This was denied by AirAsia group CEO Datuk Tony Fernandes.

“No, we have not increased our administration fees. It is still the same,’’ Fernandes said.

URL: http://biz.thestar.com.my/news/story.asp?f...68&sec=business