AirAsia Berhad

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Trust need to earn, rather than to ask...Big Grin

AirAsia shares continue to recover

"Shares in AirAsia recovered lost ground last Thursday after losing more than 27% or RM1.58 billion of their value since June 9."
“夏则资皮,冬则资纱,旱则资船,水则资车” - 范蠡
A sinking air terminal...Hmm...

Kuala Lumpur’s $1 billion air terminal is sinking, airline says

KUALA LUMPUR/SINGAPORE (July 27): Kuala Lumpur International Airport’s new budget passenger terminal is sinking, with cracks appearing in the taxiway and water forming pools that planes must drive through.

The defects could cause flight delays, increase wear and tear on planes and pose potential safety risks, according to AirAsia Bhd., the new terminal’s biggest user. Though take offs and landings aren’t affected, the carrier has asked Malaysian authorities to fix the problems before passengers get hurt, Chief Executive Officer Aireen Omar said in an interview in Kuala Lumpur.

“The airport is still sinking,” Aireen said. The operator, Malaysia Airports Holdings Bhd., “has done some partial resurfacing, but what the airport actually needs is a permanent solution.”
“夏则资皮,冬则资纱,旱则资船,水则资车” - 范蠡
The boss Tony, is saying enough is enough? Tongue

AirAsia sounding out investors to take company private - sources

SINGAPORE (Oct 6): Founders of Asia's No. 1 budget carrier AirAsia Bhd ( Valuation: 1.20, Fundamental: 0.20) are sounding out investors to take the company private in a management-led buyout, after its shares took a beating this year following a critical research report, people familiar with the matter said.

AirAsia boss Tony Fernandes and his long-time business partner Kamarudin Meranun are working with banks to secure financing for the transaction, which could be launched over the next few months, said the people, who did not want to be identified as the discussions are confidential.

Obtaining financing will be key for the deal to succeed, the people said.

An AirAsia spokeswoman had no immediate comment when contacted by Reuters.
“夏则资皮,冬则资纱,旱则资船,水则资车” - 范蠡
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AirAsia boss says he will 'forever regret' appearing to back Malaysia's Najib before election

Nyshka Chandran
May 14, 2018

AirAsia's stock slides as Malaysia's markets reopen AirAsia stock slides as Malaysian markets reopen  
4 Hours Ago | 01:16
In the aftermath of Malaysia's stunning election result, one of the country's most respected business figures has admitted to "buckling" to pressure from the previous government.

AirAsia CEO Tony Fernandes, who enjoys near-rockstar status in the Southeast Asian nation, apologized on Sunday for a flashy, apparent endorsement of then-leader Najib Razak in the run- up to the May 9 general election. Najib was defeated in an unexpected election upset at the hands of Mahathir Mohamad, who was sworn in as prime minister on Thursday.

AirAsia's stock tanked as much as 10 percent on Monday as the Malaysian market re-opened for trading post-election.

More details in
Specuvestor: Asset - Business - Structure.
appearance is more important than truth
Almost 13% upcoming dividend, seems like good value against current bearish oil price backdrop. The digital transformation initiative makes AA look like a high growth company. Any insights?
WB has written extensively on the airline business, and for the most part, was not positive on it. Large and continuous capital expenditure, global competition, and unpredictable cost of fuel expense. All these lead to low returns, which therefore necessitates a good amount of leverage -- held both on and off balance sheet -- to satisfy the returns required by shareholders.

Compared with the regional airlines that AA compete with, AA has shown to consistently outperform them in generating ROA. AA is the clear winner in the game of operational efficiency. Even then, the ROA is still a low ~5%.

If one must invest in airlines, AA -- at the correct price -- is probably a better choice than its regional peers. But if one is apprehensive about the risks associated with airlines -- such as those listed above -- it may be better to just look at other types of businesses.
A surge in air travel has yet to pay off for Southeast Asian airlines, with experts predicting that 2019 will see more fierce competition as regional carriers struggle to return to profitability.

Only six of the region’s 20 publicly traded airlines made a profit in the last reported quarter, according to a study by the Sydney-based CAPA Centre for Aviation, while 19 airlines posted declines in profits from the same July to September period a year before.

Sometimes, when expectation of of the future business landscape is obvious, the similar behaviour/response of all players in the environment makes competition more intense, and hence returns low. 

Perhaps when airlines decide to slow expansion, they will be more profitable, collectively. Its good though, that they are still competing, which benefits the consumers.

Isn't it the same in investing? When the outcome is obvious, the bidding up of prices causes returns to be low. In other words, if your investment thesis is the same/similar to almost every other market participant, it is unlikely to be able to make higher (than average) returns.

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