AirAsia is a 10cents share wherelse MAS par value is RM1

Air Asia would be worth RM10 if it RM1 par value


On Earning side,

1Q2008
For every AirAsia share it is getting back 68% returns (4Q2008 - 104%)
But AirAsia has never give any dividend in its entire history

MAS is getting 7% on every dollar and maybe declining too

By Salvatore_Dali aka Malaysiafinance blogspot

Dear Tony Fernandes

I like your entrepreneurial spirit and your business acumen. If you
look at my posting on Air Asia a few days back, I like the stock
despite the popular trend to sell airlines. You have managed to steer
brilliantly during even harder times such as during the SARs and the
tsunami - which hit air travel business a lot worse than now.

The aim of this open letter is to ask you to PLEASE STOP ACTING LIKE A
FUEL OIL TRADER. You are in the business of running a LCC.

One can try to be too smart by timing and trading fuel price,
especially since it has been so volatile.

Why You Should Stop Being An Oil Trader:

a) If you bet wrongly, it affects the prospects and valuations of AirAsia.

b) If you get the timing well, save the company a lot of money, it
WON'T be applauded by analysts or investors because these are "one-offs".

The jumps in earnings due to slick timing of fuel price will not
result in better valuation. In fact analysts will use that fact to
downgrade the stock to a discount to other LCCs and major carriers as
it remains an uncertainty.

Currently, AirAsia has hedged 30% of its fuel requirements for 1H08.
You have wisely covered the liability from the call options up to
3Q09. What must stop is the way AirAsia communicates its hedging
strategy: e.g. "the cost of ofsetting the call options was wholly
covered by the income from writing various puts".

Still, on the bright side, even if the price of oil goes to US$170,
AirAsia should still be profitable - a fact which escapes 99% of the
sellers currently.

Singapore Airlines start hedging today for 18 months in the future.
Whatever the date in the future is, they will build up 50% cover and
they will do it with fairly traditional hedging mechanisms. Cathay
Pacific's method as more convoluted. They have put in place a complex
structure of swaps, options and three-way options [selling put, buying
call and selling another call with a higher strike price]. And that
gives them a degree of protection. They are hedged about 30% for 2008
volumes. The head of commodities at one global investment bank names
Qantas, All Nippon Airways and Japan Airlines as committed fuel
hedgers. Malaysia Airlines, meanwhile, has a conservative policy of
benchmarking its fuel hedging ratio against the average hedge ratio of
regional airline peers. AirAsia takes a more directional bet as part
of its hedging policy.

Yes, Air Asia is not alone in they way it hedges fuel oil. The harder
it is, the more convoluted it is to understand, the worse it will be
for investors to rate the stock properly. The more conservative it is,
you will then take the fuel oil out of the equation. You have a solid
business model, solidified by having your own LCC terminal - don't put
so many variables into the equation. Final analysis- make it a
conservative hedge policy, make it known to all, make it easy to
understand and calculate, be transparent, don't make people guess or
hope n' pray. You are not paid to make money on fuel price, you are
not supposed to and people don't expect you to (even when you own the
company).

Wait for confirmation @0.90, accumulation indicator pointed up, not an uptrend yet

T. Rowe Price Associates, Inc. still has 142,792,400 shares to sell as at 20/06/2008

The prices of commodities nowadays are not controlled by producers but are fixed by hedge funds traders.


If you think AIRASIA is doing well, think about what AIRASIA is going to do,

<<<
Fuel Hedge
As at 31 March 2009, the Group has a net sell Put position of 2.2 million barrels at
prices of USD 35/barrel and USD 42/barrel for the period up to June 2010. These net
sell positions will expire progressively up to June 2010. As at end of today (28 May
2009), the net sell position is 1.6 million barrels.
>>>