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 Airasia, Airasia

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cherroy
post Sep 4 2009, 03:50 PM

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QUOTE(DoctorFaust @ Sep 4 2009, 02:35 PM)
Dear all,

(Tell you all first ah, This post actually not really related to our own business, however, it may help us to brain-storm something... perhaps)

Personally, I like AirAsia.

Why? because low cost is the trend! everyone wants low cost. At least 80% of among all population are low cost oriented. It's a huge pie!

Recently quite curious about its operation and been follow-up their reports and research closely. I found out in fact they are suffering lost during year 2008 due to crude oil contract (Don't laugh at me, I am slow)!

I have been thinking if they can come out with something that can overcome it's tight financial sure can buy it's share lo.  drool.gif

Ok, Main topic here is,

Do you have any idea how to improve it's operation, finance, marketing? or any opinion, feeling towards AA?

This thread is just discussing anything related about AirAsia Core Business (Aircraft la, not hotel...  smile.gif ) as the 3rd party of view.

By the way, Is there any other Low cost big pie that havent get explored by those by monopoly/oligopoly ah? (Maybe I am dreaming) But if yes, tell me wo, Maybe we can come out with something really.... awesome.... (Obama said: "Yes, we can!")  rclxms.gif

*
Big business is one thing, making profit is another thing, you need to look at both front to conclude a business is good.

Also how to improve operational wise is not something outsiders can comment accurate, although we can suggest from experience from service get, as we don't know how the inside operation is.

For those Airasia shareholders, it is not rewarding for them or yet (share price below IPO while no dividend since IPO), instead you need to fork out extra to have its right issue, instead they give dividend to you.

Airliners are very vulnerable to economy shock, like recession or high oil price, while airliners business nature is always high leverage which exposed more to the shock/risk.
CKC (Sense-Maker)
post Sep 5 2009, 06:29 PM

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No investors in aviation industry makes real money in the past 10 years. Low-cost carrier is the only model that may make money. Air-asia continues to bank on passenger volume by expanding its geographical reach. In the next few years, Airasia will continue putting back wahtever profit it makes to capital expenditure. Its borrowing is high too. MAS is definitely a heavily-subsidized national champion working on unsustainable model, thanks to low-cost model that has shaken the industry, which will continue in turmoil due to its vulnerability to oil price. My take is: avoid even Airasia and only buy it when it dips.
cherroy
post Sep 6 2009, 11:59 AM

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QUOTE(CKC (Sense-Maker) @ Sep 5 2009, 06:29 PM)
No investors in aviation industry makes real money in the past 10 years. Low-cost carrier is the only model that may make money. Air-asia continues to bank on passenger volume by expanding its geographical reach. In the next few years, Airasia will continue putting back wahtever profit it makes to capital expenditure. Its borrowing is high too. MAS is definitely a heavily-subsidized national champion working on unsustainable model, thanks to low-cost model that has shaken the industry, which will continue in turmoil due to its vulnerability to oil price. My take is: avoid even Airasia and only buy it when it dips.
*
That's true, even the like most well managed airliner line SIA, share price is stagnat (in fact you could make a loss if bought 10 years ago) for the past decade while compared to other steady consumer staple, commodities stocks, share price has been double or triple in the past decade.

Aviation is a high leverage, high cash burn rate, highly competitive and vulnerable to any economy shock. They can make billion year in year out, but just need an event or economy recession, all profit made from past can be varnished.

Generally I don't view airliner stocks are suitable for long term and steady play, as there are other better alternative stocks in the market offer low risk, while still can enjoy some growth rate, airliner stock is more a trading target.

They are not able to pay much dividend due to high gearing, high cash needed for the operation, which invetors only can rely on capital appreciation side, means one needs to trade the stock, buy low sell high to gain money from the stock.

Just my view.
CKC (Sense-Maker)
post Sep 6 2009, 11:00 PM

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EPF and publicly-funded Khazanah bought stakes in Airasia for strategic reasons. Airasia is already expanding the spin-off tune hotels, insurance, etc to stay in black. All in all, aviation, once opened up, has shown to be having not-that-high barrier of entry. More players than the industry and economy can feed. Hence, the plunging fares. That in turn is one of the best side-product of globalisation, just as everyone now can use 3G. The margin of Airlines always has to contend with oil price fluctuation. Hedging is also a double-edged sword. Without certainty of margin, expansion of passenger volume and fleet is no guarantee of profit. Tony Fernandez has been doing a marvellous job but is it enough to stand out as a global player? It is a long way off.
smartly
post Sep 11 2009, 02:29 PM

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The airline business has been extraordinary. It has eaten up capital over the past century like almost no other business because people seem to keep coming back to it and putting fresh money in. You’ve got huge fixed costs, you’ve got strong labor unions and you’ve got commodity pricing. That is not a great recipe for success.

The worst sort of business is one that grows rapidly, requires significant capital, and then earns little or no money. Think airlines.


Morisato
post Oct 15 2009, 01:05 AM

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so ...still can invest?
SUSkalambong
post Nov 13 2009, 01:49 PM

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Air Asia is flying to trouble sky.

Tony is following the footsteps of Sir Freddie Laker and Don Burr, and Tony's Air Asia will be following the footsteps of Laker Airways and PeopleExpress Airlines, if Tony fail to focus on his core business, that is, cut-rate air travels.
CKC (Sense-Maker)
post Nov 14 2009, 02:18 AM

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Firefly is the reason why Airasia share price has not been flying anywhere. With cheap fare and lots of competition the world over, Airasia is good value if you trade within the range of Rm1 to RM1.20.
htt
post Nov 20 2009, 06:55 PM

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Airasia result
http://announcements.bursamalaysia.com/EDM...E5?OpenDocument
IGax2000
post Nov 21 2009, 08:47 PM

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airasia is doing well for this year 3 quarters, how come the price is still look like stagnant? hmm.gif
mazda626
post Nov 21 2009, 08:57 PM

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Still can make profit but very slim. Bought once before 10 lots 1.30 then sell at 1.65 after minus all the charges really sikit. Drop more than upward lah this counter. Better put somewhere the capital. Simply not productive UNLESS if u r die hard fan of Airasia.

And as in bizniz sense, TF simply copying Virgin's stylo - into everthing.


Added on November 21, 2009, 9:00 pm
QUOTE(CKC (Sense-Maker) @ Nov 14 2009, 02:18 AM)
Firefly is the reason why Airasia share price has not been flying anywhere. With cheap fare and lots of competition the world over, Airasia is good value if you trade within the range of Rm1 to RM1.20.
*
Yup 101% agree.

This post has been edited by mazda626: Nov 21 2009, 09:00 PM
htt
post Nov 22 2009, 12:12 AM

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QUOTE(IGax2000 @ Nov 21 2009, 08:47 PM)
airasia is doing well for this year 3 quarters, how come the price is still look like stagnant? hmm.gif
*
Air Asia still under high risk.
1. Airline stock is high risk, because high capital requirement, volatile and competitive market, protectionism, publicity etc.
2. AA balance sheet not so strong, cash generated just enough to cover capital commitment.
3. Share just diluted with private placement.
4. Thai associate co still making loss.
5. Big order of A320, where to deploy etc, cannot park and let it rust, right?
and so on and so on...

But I still hold and looking into addition if price drop... high risk high return...
Personal opinion only... tongue.gif
airline
post Nov 22 2009, 10:30 AM

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Bought once before 10 lots 1.30 then sell at 1.65 after minus all the charges really sikit

u picked the right time to let go... if keep sampai sekarang.
IGax2000
post Nov 22 2009, 02:50 PM

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QUOTE(htt @ Nov 22 2009, 12:12 AM)
Air Asia still under high risk.
1. Airline stock is high risk, because high capital requirement, volatile and competitive market, protectionism, publicity etc.
2. AA balance sheet  not so strong, cash generated just enough to cover capital commitment.
3. Share just diluted with private placement.
4. Thai associate co still making loss.
5. Big order of A320, where to deploy etc, cannot park and let it rust, right?
and so on and so on...

But I still hold and looking into addition if price drop... high risk high return...
Personal opinion only... tongue.gif
*
so risky, then i will set my buy price to $1.09. since this price also support by fibo
the snowball
post Nov 22 2009, 04:35 PM

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http://whereiszemoola.blogspot.com/2009/11...h-airasias.html

This blogger bring up some valid point about air asia current result. Look at his past posting on Air Asia too.
mazda626
post Nov 23 2009, 01:26 AM

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Better stay away from this counter awhile. Put capital somwhere but NOT airasia. Current price $1.28 ; better wait 0.90 or 1.00 to be really sure.
andrewckj
post Nov 23 2009, 04:19 AM

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QUOTE(mazda626 @ Nov 23 2009, 01:26 AM)
Better stay away from this counter awhile. Put capital somwhere but NOT airasia. Current price $1.28 ; better wait 0.90 or 1.00 to be really sure.
*
I agree. As an investors, it's always good not to put money into high risk business. AA is one of them since its operating in airlines industries. Capital intensive, high in debts, great competition, fluctuations of oil prices..all this does't rhyme well for a business to be successful.

It will be sometime before AA will declare dividend.

Even you are a supporter of AA, better invest in other counter to reap the rewards and use the reward to buy AA tickets. Isn't this better?
! Love Money
post Nov 23 2009, 08:47 AM

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QUOTE(htt @ Nov 22 2009, 12:12 AM)
Air Asia still under high risk.
1. Airline stock is high risk, because high capital requirement, volatile and competitive market, protectionism, publicity etc.
2. AA balance sheet  not so strong, cash generated just enough to cover capital commitment.
3. Share just diluted with private placement.
4. Thai associate co still making loss.
5. Big order of A320, where to deploy etc, cannot park and let it rust, right?
and so on and so on...

But I still hold and looking into addition if price drop... high risk high return...
Personal opinion only... tongue.gif
*
5. i read from news that they have defered the delivery of A380 for this year... should save them some money is it?
htt
post Nov 23 2009, 09:02 AM

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QUOTE(! Love Money @ Nov 23 2009, 08:47 AM)
5. i read from news that they have defered the delivery of A380 for this year... should save them some money is it?
*
Whatever in already in (means the loan kick in and service of loan start, think the loan all term loan with fixed repayment one), the deferment helps to reduce future cash outflow and it might be right move in current market condition. So far the cash management still ok, matching out with in (but no need to hope for dividend tongue.gif ). Continue forward if everything work all right, should wait for another 2~3 years before the real cash coming in. My personal opinion only. blush.gif
Oracles99
post Nov 23 2009, 11:35 PM

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I sold my AirAsia from IPO sometime back at an average price of RM1-50. As far as I can remember, AirAsia has not paid any dividends since the IPO.

It is said to be a growth stock but without dividends, investors can only smell its profits!

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