AirAsia chief: IPOs of Indonesian, Thai units on schedule

KUALA LUMPUR (Dec 13): AirAsia Group has reaffirmed that the proposed initial public offerings (IPO) of its Indonesian and Thai affiliates are on schedule.

"Both IPOs are on schedule with regards to due diligence process and the seeking of regulatory approvals," said its group chief executive officer, Tan
Sri Tony Fernandes, in a statement here on Tuesday.

Fernandes made the statement after AirAsia's public relation team was misquoted in a recent interview.

"We have always maintained the actual listing will be dependent on market conditions. In short, both Thailand and Indonesia continue to perform strongly heading into 2012," he said.

The Thai affiliate is submitting its listing application to the regulators in the early part of the first quarter of and Indonesia will follow suit shortly after. --

Airlines stocks dip in early trade

KUALA LUMPUR: Shares of MALAYSIAN AIRLINE SYSTEM BHD [] (MAS) and AIRASIA BHD [] fell in early trade on Wednesday, Aug 24 after the airlines posted vastly different results but said that fuel prices remained a concern.

At 9.15am, MAS fell four sen to RM1.60 while AirAsia lost 11 sen to RM3.52.

MAS' net loss for the second quarter ended June 30, 2011 narrowed to RM526.68 million compared with net loss of RM534.73 million a year ago
as it continued to be impacted by the high fuel prices.

AirAsia reported earnings of RM104.25 million in the second quarter ended June 30, 2011 as its operations were affected by higher fuel costs, which rose 31%. Net profit fell 47.5% from the RM298.93 million a year ago.

MIDF Research has cut its target prices for both airlines. It slashed MAS' FY11 and FY12 earnings significantly to reflect the expected poor performance ahead.

'Switching our valuation to price-to-book value (PBV) method as we expect MAS to be loss making in FY12, we arrive at a target price of RM1.60 pegged to 2.0 times PBV, which is the regional peers' average.

'We downgrade our recommendation to TRADING SELL as we believe MAS' poor 2Q11 performance will dampen sentiment towards the stock,' it said on Aug 24.

On AirAsia, the research house said it was tweaking its forecasts for FY11 and FY12 downwards by -28.8% and -19.0% to take into account the higher deferred tax and the lower forex gains.

'Rolling over our valuation to FY12, we arrive at a revised target price of RM4.15 (from RM4.60). We maintain our TRADING BUY recommendation as we believe that the good operational performance will stir interest in the stock in the near term,' it said.

MIDF Research said while it expects that global economic conditions to remain uncertain, it said AirAsia was well situated to weather the storm due to its position as a low cost carrier.

'Our target price is derived by pegging its FY11 EPS to PER of 12.8 times, which is a 25% premium to its peers,' it said.

#Update* AirAsia places firm order for 200 A320 Airbus aircraft

KUALA LUMPUR: AIRASIA BHD [] placed a firm order with Airbus for 200 A320neo aircraft, which is the largest order for the aircraft manufacturer.

Altogether, AirAsia has now placed firm orders for 375 A320 Family aircraft, with 89 already in service on the carrier's fast-growing pan-Asian network. In addition, the carrier's long haul affiliate AirAsia X is also an all-Airbus customer having placed orders for 38 widebody aircraft.

The order for the 200 aircraft makes AirAsia the biggest airline customer for the Airbus single aisle product line worldwide. Its A320neo aircraft will be powered by CFM International's new LEAP-X engines.

AirAsia group chief executive officer Tan Sri Tony Fernandes said on Thursday, June 23 with this historic deal, AirAsia had secured its future with the ability to meet the huge growth potential offered by the Asian market.

'Our decision to be one of the launch customers for the A320neo will ensure that we remain at the forefront of our business, with one of the world's youngest and most modern fleets," he said at the Paris Air Show.

The A320neo, which incorporated new engines and large wing tip devices called sharklets, will ensure fuel savings of 15% and additional range capability of 500 nautical miles (950 km), or the ability to carry two tonnes more payload at a given range.

The fuel savings translate into some 3,600 tonnes less tonnes carbon dioxide per aircraft per year. In addition, the A320neo will provide a double-digit reduction in NOx emissions and reduced engine noise. The A320neo will have over 95% airframe commonality with the existing models, enabling it to fit seamlessly into existing A320 Family fleets.

Over 7,000 A320 Family aircraft have already been ordered and almost 5,000 delivered to more than 330 customers and operators worldwide.

HDBSVR: AirAsia fully valued at RM2.65

KUALA LUMPUR: Hwang DBS Vickers Research said AirAsia is fully valued at RM2.65 and had a price target of RM2 for the low-cost carrier.

It was commenting on AirAsia's tie-up'' with Expedia Inc to set up an online travel agency that has three main brands -- AirAsiaGo, GoRooms and Expedia.

AirAsia announced on Tuesday, March 29 the JV would be equally owned by both parties and AirAsia's initial investment in the JV will be up to US$10 million (RM30 million) which will be funded by internal funds.

Expedia is the world's largest online travel company with Australia and Japan being their strongest markets in Asia.