Despite its very small presence in Southeast Asia’s largest domestic market, AirAsia is still ASEAN's largest LCC group.

But Lion is already bigger in ASEAN than the Jetstar or Tiger groups and has also overtaken AirAsia as the largest airline group in the intra ASEAN-market based on current capacity figures on routes within Southeast Asia.

AirAsia confirmed a Rm30 billion order for 100 more Airbus jets comes on top of 375 similar planes already ordered which makes a total of 475.

Airbus has already delivered more than 112 A320s to the airline & will deliver on stages the balance 363 aircrafts.

The borrowings in stages for the balance orders: 363 aircrafts = Rm109 bil. The Group’s total debt as of END OF SEPTEMBER 2012 was Rm7.8 bil

For the 3QE12, CEO Aireen Omar said in the statement the airline's cash position remains strong with Rm2.2 bil in cash and bank balances.

The discount carrier, one of the biggest customers for European aircraft maker Airbus, has a fleet of 112 A320s and is expecting 266 more aircraft to be delivered up to 2026.

Indonesia AirAsia’s lack of a local distribution network is viewed as the main reason why the carrier has struggled to gain a foothold domestically.

All of Indonesia’s major domestic carriers rely heavily on its network of travel agents, including market leader Lion, as web booking penetration levels remain low in the country – and, critically, the portion of the population that have credit cards also remains low.

Sell on negative rumor, sell more on the news!

Global index provider FTSE Group and Bursa Malaysia Bhd today announced that Astro Malaysia and Felda Global Ventures will replace AirAsia and Malaysia Marine and Heavy Engineering (MMHE) on the FTSE Bursa Malaysia KLCI following the semi-annual review of the FTSE Bursa Malaysia Index Series.

While the fleet expansion should ensure Indonesia AirAsia maintains its position as market leader in the international market, Indonesia AirAsia's market share domestically is likely to remain in the single digits.

Even if equal domestic and international growth is pursued over the next five years (about 20 aircraft for each market), AirAsia domestically would still be smaller than the present day size of Batavia and Sriwijaya.

Lion, Wings, Garuda and Citilink meanwhile have the aircraft orders in place that will result in each of these carriers adding more aircraft than Indonesia AirAsia, albeit from a higher base.

Folks, minus the onetime gain, the nine months profit is lower by Rm60.930 mil from previous year 9 months.

Indonesia AirAsia only serves eight domestic destinations, giving it a network that is much smaller than its competitors and surprisingly small given the vast size of the country and the fact that Indonesia in 2011 had 20 airports with at least one million domestic passengers.

Batavia, in comparison, serves 41 domestic destinations. Indonesia AirAsia has eight international destinations while Batavia has seven.

AirAsia established its original Indonesian affiliate in 2004 but the carrier has been slow to expand (it currently only operates a fleet of 19 A320s) and had to abandon its original strategy of competing across domestic trunk routes after losing a fierce battle against much larger Lion.

Indonesia AirAsia to proceed with IPO despite weak position domestically. With the Batavia deal formally called off, the AirAsia Group is now able to move forward with a planned initial public offering at Indonesia AirAsia, which is likely to take place in early 2013.

The IPO was originally planned for 3Q2012, shortly after the IPO at Thai AirAsia and before the upcoming AirAsia X IPO, but was postponed after the Batavia deal was announced.

While investors now have a clearer picture of Indonesia AirAsia’s position in the market, the Group’s overall position in Indonesia has been weakened as without the Batavia deal AirAsia will likely struggle to meet its goal of becoming a significant player in the domestic market.

The AirAsia Group initially unveiled plans to buy a 49% stake in Batavia for USD40 million at a high profile signing ceremony in Jakarta in Jul-2012.

The group initially said it expected in 2Q2013 to conclude the transaction, which also involved its Indonesian partner Fersindo acquiring the remaining 51% from Batavia’s existing private owners.

But AirAsia announced on 15-Oct-2012 it had decided not to move forward with the proposed deal, saying there were too many risks.

The Batavia acquisition, while against the grain of normal AirAsia strategy, would have given the group a respectable third place position in Indonesia’s domestic market.

Batavia would have also given AirAsia slots at Jakarta’s congested airport and access to a valuable local distribution network.

Perhaps most significantly the Batavia deal would have allowed AirAsia to compete more effectively against fast-expanding Indonesian LCC group Lion Air, which has emerged as a bigger rival to AirAsia than the more well known Jetstar or Tiger groups.

AirAsia’s decision to drop plans to acquire Indonesian carrier Batavia Air leaves the group with the daunting task of having to rely on organic growth to increase its share of Indonesia’s booming but crowded domestic market.

Southeast Asia’s leading LCC group is now the sixth largest player in the region’s biggest domestic market, a glaring weakness in an otherwise strong portfolio that it was aiming to overcome by acquiring Batavia.

While AirAsia X was of the view it could achieve a balance of slot-restricted and open airports, its utilisation rate perhaps suggests otherwise.

AirAsia X is also finding it can gain yields by having flights connect better with others. As evidenced by the hybridisation of LCCs, it is perfectly acceptable for CASK to grow if the increase is outpaced by revenue growth as a result of the increased complexity.

A relatively minor decrease in utilisation rates is not necessarily an entirely negative story. As the carrier briefly notes (but likely missed an opportunity to elaborate on to shore up investor confidence), fleet flexibility has been limited in recent years.

AirAsia X came into markets trumpeting utilisation rates above all else, operating flights not only at odd hours of the morning but having flight times vary on almost a daily basis.

It is now chasing higher yields, entering slot-restricted airports like Beijing, Haneda and Sydney.

Their affect on utilisation rates could be mixed.

While their older age may reduce dispatch reliability, requiring greater ground time and lower utilisation rates, the scale they provide the fleet could allow for an overall increase in utilisation, which has slightly fallen from its 2009 peak of 16.4 hours a day, although its utilisation rates of around 15 to 16 hours are, it believes, the highest for the aircraft type.

AirAsia X says it believes its maximum utilisation rate is 17 hours a day, which other carriers nudge up to: Cathay Pacific, for example, averaged only 12.1 hours for its A330-300s (which also operate shorter sectors) but 15.7 hours for its 777-300ERs.

AirAsia X is confident it can increase revenues, especially ancillary ones, but it faces a rising cost base.

After fuel, maintenance is the carrier's largest cost (19%) and will be increasing as its fleet ages. The carrier's average fleet age, and associated maintenance needs, will increase with the addition of six leased A330s from Dragonair via ILFC.

While these aircraft have been secured to accelerate growth and see that the carrier maintains a clear edge over Scoot, they will not be as efficient as its new A330s.

The European services had a longer stage length, which typically reduces CASK, but the A340-300s operating the sectors seated 50 fewer passengers than AirAsia X's A330-300s.

Any CASK efficiencies from the European services could have been offset by the higher CASK of India flights, which were about four to five hours in duration.

Revenue is growing but so too is CASK as utilisation takes a hit and maintenance creeps up.

Since 2010, revenue per RPK and CASK have been growing, with revenue in 1H2012 increasing 12.7% year-over-year compared to 6.7% CASK growth.

It is not evident yet what the affect will be of the withdrawal of services from Europe, India and New Zealand.

cont.....

While AirAsia X expects most growth to be concentrated around Asia-Pacific, it does mention the possibility of serving markets in eastern Europe, south and central Asia, the Middle East and north Africa with A330-300s from its Kuala Lumpur hub.

New bases would open different cities, both in terms of demand and accessibility with aircraft range, but AirAsia X has expressed interest in achieving scale in existing AirAsia group destinations, allowing it to piggyback off existing ground infrastructure and market awareness of the AirAsia brand.

AirAsia will likely watch Scoot, which may be more bullish in opening new markets outside of Asia-Pacific.

As part of its fleet expansion, AirAsia X expects to increase most existing services to double daily while increasing services to cities like Chengdu and Osaka to a daily offering.

Beyond that AirAsia X in the prospectus flags interest in serving Australia's Adelaide, China's Chongqing and Japan's Fukuoka and Nagoya.

AirAsia X benefits from liberal bilateral agreements, including open skies to China, Japan, South Korea and Taiwan. Singapore, the home of Jetstar Asia and Scoot, faces restrictions to South Korea.

cont...

AirAsia X also disclosed it estimates it will pay Malaysia Airlines by 31-Dec-2012 MYR57.1 million (USD18.7 million) to carry passengers to the European and Indian routes it discontinued.

While the figure may be substantial, AirAsia X's losses would have certainly have exceeded that amount had it kept flying.

Airbus' November 2012 orders and deliveries report reveals that AirAsia X cancelled their last A330-200s on order.

AirAsia X ordered two A330-200s in February 2011, but did not take delivery of either one despite both having been built. Eventually, Hong Kong Jet and Iraqi Airways took delivery of each aircraft.

Share Price Performance dated 11-Dec-2012:

Month : High price -(Date) : Low Price (Date)
1 mth : 2.990 (14-Nov-12) : 2.680 (11-Dec-12)
3 mth : 3.190 (19-Oct-12) : 2.680 (11-Dec-12)
12 mt : 3.850 (06-Jul- 11) : 2.680 (11-Dec-12)

Critical support level at Rm2.68, folks! In the business world, the rearview mirror is always clearer than the windshield.

EPF
Latest:Disposed 05/12/2012 8,700

Disposed 04/12/2012 2,315,600
Disposed 03/12/2012 1,701,400
Disposed 30/11/2012 2,000,000
Disposed 29/11/2012 2,000,000
Disposed 28/11/2012 3,000,000
Disposed 27/11/2012 3,000,000
Disposed 26/11/2012 2,400,100
Disposed 23/11/2012 2,917,000
Disposed 22/11/2012 3,495,800
Disposed 20/11/2012 4,000,000
Disposed 20/11/2012 4,000,000
Disposed 19/11/2012 2,500,000
Disposed 14/11/2012 2,609,800
Disposed 12/11/2012 15,900
Disposed 06/11/2012 681,300
Disposed 02/11/2012 1,250,000
Disposed 01/11/2012 1,000,000
Disposed 29/10/2012 100,300
Disposed 25/10/2012 137,000
Disposed 23/10/2012 850,000.
Disposed 22/10/2012 1,698,700.
Disposed 19/10/2012 2,788,300.
Disposed 18/10/2012 3,000,000.
Disposed 17/10/2012 2,821,700.
Disposed 16/10/2012 1,361,300.
Disposed 15/10/2012 1,326,700.
Disposed 12/10/2012 1,400,000.
Disposed 11/10/2012 1,410,700.

TUNE AIR
Acquired: From 15/10/12 till 30/11/12 44,080,000 units at 2.904 costing Rm128 million.

Buy on fear, sell on greed.

Good for you, Mr Millionaire. Profit is sweet, even if it comes from deception. Hahahahahahahahah!!

Don't worry folks, Tune Air will be buying more eventhough the local & foreign funds are selling aggressively!

You can either follow Tune Air or otherwise! Adios!!

Millionaire, you are active buyer when the price was above Rm3. Care to share your story? Tq.

04/08/ 2011 Rm4.20 Historical High.

11/12/2012 Rm 2.69 Trading Price.

Don't worry folks, Tune Air is buying more to support the price. Remember, critical support level at Rm2.68!

AirAsia X to keep A340-300s but still working to dispose of A330-200s.

To achieve better efficiency to Europe, AirAsia X in Dec-2010 agreed to take three A330-200s, its first of the type, which seats fewer but has a longer range than its A330-300s.

They were to offer a step up in efficiency over its A340-300s, but following the cancellation of European services the aircraft are no longer needed.

One aircraft order was converted to an A330-300, scheduled for delivery in 4Q2014; one A330-200 was built for AirAsia X but disposed of to a third party while AirAsia X intends to sell or lease its remaining A330-200 due for delivery in Nov-2012.

AirAsia X says there is no direct penalty from Airbus for its disposals, perhaps one of the other spinoff benefits from its relationship with AirAsia.

22/11/2012 TP 3.50 TA
22/11/2012 TP 3.61 RHB
22/11/2012 TP 3.39 OSK
22/11/2012 TP 3.84 MIDF
22/11/2012 TP 3.07 Kenanga
22/11/2012 TP 2.90 HWANGDBS
22/11/2012 TP 3.00 CIMB
22/11/2012 TP 2.80 AMMB
18/10/2012 TP 3.63 Credit Suisse

Remember folks, critical support level is at Rm2.68! What seems low and cheap generally goes lower. Happy Investing!

Definition of stock 'Bubble'
1. An economic cycle characterized by rapid expansion followed by a contraction.

2. A surge in equity prices, often more than warranted by the fundamentals and usually in a particular sector, followed by a drastic drop in prices as a massive selloff occurs.

3. A theory that security prices rise above their true value and will continue to do so until prices go into freefall and the bubble bursts.

Local, foreign & index funds are the main seller since September 2012 while Tune Air is the only main buyer buying as high as 3.12 ringgit.

Sell on negative rumor, sell more on the news! Heheheheheheheh!!

"How do you become a millionaire? Make a billion dollars and then buy an airline." Warren Buffett.

Heheheheheheheheh!!

AirAsia X to keep A340-300s but still working to dispose of A330-200s.

The impact from AirAsia's influence on AirAsia X to serve Europe extends beyond balance sheet losses.

AirAsia X acquired two A340-300s on lease to serve Europe and has since sub-leased the aircraft out for the duration of 2012 and hopes to continue sub-leasing them until their leases expire in 2015.

Losses from the sub-lease could grow as demand weakens due to the global economy and as fuel prices remain high.

AirAsia X in 2010 and 2011 spent approximately MYR61.6 million (USD20.2 million) to lease its two A340-300s.

In 1H2012, with reduced flying following the European pull-down, leasing costs for the two frames dropped to MYR23.0 million (USD7.5 million).

Share Price Performance dated 10-Dec-2012:

Month : High price -(Date) : Low Price (Date)
1 mth : 2.990 (14-Nov-12) : 2.690 (10-Dec-12)
3 mth : 3.190 (19-Oct-12) : 2.690 (10-Dec-12)
12 mt : 3.850 (06-Jul- 11) : 2.690 (10-Dec-12)

Critical support level at Rm2.68, folks! In the business world, the rearview mirror is always clearer than the windshield.

Stock market bubbles don't grow out of thin air. They have a solid basis in reality, but reality as distorted by a misconception.

So folks, don't paly on thin ice! Careful now!

Folks, as mentioned, this time it's different. What seems low and cheap generally goes lower.

Wakakakakakakakakakak!!

FlyAsianXpress (FAX) was an airline based in Sarawak, Malaysia. It operated services on some of the smaller routes dropped by national carrier Malaysia Airlines. Its routes have since been taken over by MASwings.

FAX was privately owned by Kamarudin Meranun, Raja Razali, Raja Azmi and Tony Fernandes. The airline was subcontracted by AirAsia to operate several domestic services following the withdrawal of Malaysia Airlines from rural air service routes within East Malaysia.

Its maiden flight was on 1 August 2006, despite being delayed for 50 minutes by bad weather. FAX was not a low cost carrier, but it incorporated some of AirAsia’s practices in order to reduce cost. Namely; internet and phone bookings, as well as ticketless check-in systems.

Within days of operation it was subject to a flood of criticisms from commuters, civil servants, and people working in the tourism industry.

Critics argued that the new turboprop service provided by FAX should not be more expensive than the rural air service previously operated by Malaysia Airlines, as FAX was subsidised by the Malaysian Government.

As well as cost, the airline was criticized for poor service, such as sudden flight cancellations without notice. FAX released a new flight timetable citing the sudden need for heavy maintenance on its Fokker 50 fleet as the trigger for severe disruption to its schedules.

On 11 April 2007, Tony Fernandes, CEO of the parent company of FAX (AirAsia), publicized details of a handover offer of FAX's rural routes, to Firefly, a subsidiary airline of Malaysia Airlines.

On 26 April 2007, the government announced Malaysia Airlines would take over the operation of rural air services from FAX, and gave assurance that any financial loss will be born by the government.

Malaysia Airlines announced the take over of FAX destinations beginning on 1 October 2007. Malaysia Airlines would operate these routes through a new subsidiary, MASwings.

With FAX rural air services replaced by MASwings, the corporate name was changed from FlyAsianXpress Sdn. Bhd. to AirAsia X Sdn. Bhd. with this, the airlines focus switched to a new market. Namely, low cost, long haul flights.

On 12 January 2012, AirAsia X withdrew services to Delhi, Mumbai, London, and Paris. The airline also withdrew its service to Christchurch, New Zealand on 31 May 2012 after only a year of launching service. On 08 October 2012, Airasia X announced a sudden 7-day notice to withdraw services to Tehran.

Marketing is about making promises and then keeping them. Can AirAsia guarantee that it will be able to obtain an AOC after 31 March 2013 and fulfill part of the bargain by flying the passengers after that date?

Only God knows what will happen to the AOC of AirAsia after 31 March 2013!

Read more here: http://weechookeong.wordpress.com/2012/12/08/xmas-big-sale/

Cont.....

The ownership structure of such growth is unclear; as a Malaysian carrier AirAsia X cannot base aircraft at foreign ports.

It could place the A330s on the registry of short-haul AirAsia brands like Thai AirAsia and AirAsia Japan, or it could establish its own foreign joint ventures, such as AirAsia X Japan.

In either case, AirAsia X would not see the full profits as they would be shared with local investors, who in other countries need to own at least 51% of a carrier.

With the fast moving Asian landscape this is all still a work in progress.

AirAsia and AirAsia X are still working through the details and the prospectus offers little clarity.

Share Price Performance dated 7-Dec-2012:

Month : High price -(Date) : Low Price (Date)
1 mth : 2.990 (14-Nov-12) : 2.760 (07-Dec-12)
3 mth : 3.190 (19-Oct-12) : 2.760 (07-Dec-12)
12 mt : 3.850 (06-Jul-11) : 2.760 (07-Dec-12)

You only find out who is swimming naked when the tide goes out!

Analysts said AirAsia could be excluded from the FBM KLCI 30-stock index.

Sell on negative rumor, sell more on the news!

A leadership transition may be in the wind.

In the absence of reassurances to the contrary, the prospectus may suggest that a leadership transition is under way at AirAsia X. The document notes Mr Osman-Rani's contract expires in Jul-2013 in what will likely be right after the IPO and perhaps a fortuitous time for him to find a new challenge.

Mr Osman-Rani has held a number of business roles prior to coming to AirAsia X, his first airline job, and the aviation industry is not one to handsomely reward hard-workers. His style is one centred on achieving success and turnarounds.

Doing not only what many doubted – bringing a long-haul LCC to sustainable existence – but bringing it to market could be a fine way to bow out for his next endeavour.

A key trait that any successor will need to possess is the ability to achieve the appropriate balance between reliance on AirAsia's connectivity and the inevitable quid pro quo that follows with that relationship.

The European route experience suggested a subordinate role for AirAsia X, in order to achieve strategic and operational goals which probably benefited AirAsia more than AirAsia X.

The Philippine unit of giant regional budget airline AirAsia announced it will end its 7x weekly Kota Kinabalu–Clark flights effective February 1, 2013.

Asked in Aug-2012 about the location of future growth after AirAsia X announced a growth acceleration, Mr Osman-Rani remarked “my personal preference is Asia”.

He has been less bullish than AirAsia founder and CEO Tony Fernandes about re-entering Europe with A350s, although Mr Fernandes may have been making such remarks to generate media profile.

Mr Fernandes is known for his microblogs on Twitter, and in one statement, after meeting with officials from Japan's Nagoya, publicly wrote to Mr Osman-Rani asking for an AirAsia X route to Nagoya – perhaps only half-serious, indicating both that there is no clear demarcation between AirAsia and AirAsia X and that the synergies between the two can be highly valuable.

Withdrawal reasons were complex, but launch of services to Europe and India – the more high-profile of the carrier's losses – were mainly at the behest of AirAsia.

AirAsia X has sought to remove itself from AirAsia's influence and different culture by re-locating its head office away from AirAsia.

Despite AirAsia X being a separate company from AirAsia, aside from shareholder overlap, sharing a brand and certain functions like booking engine, there are sometimes hints AirAsia is still exerting influence that may not lead to the strongest possible profits.

AirAsia X also faced a distribution hurdle: ethnic Indian Malaysians traditionally hail from southern India, leaving AirAsia X's Mumbai and New Delhi services without VFR traffic that could be gained via word of mouth recommendations.

For Mumbai and New Delhi, AirAsia X was dependent on local distribution but was hindered by AirAsia's agreement with online travel agency (OTA) Expedia that made the OTA AirAsia X's online partner, cutting AirAsia X off from more popular Indian OTAs.

Meanwhile Christchurch in New Zealand was started with solid intentions but affected by weakened demand due to the earthquake, which occurred almost simultaneously with the route's inauguration and devasted the city.

EPF
Latest:Disposed 04/12/2012 2,315,600

Disposed 03/12/2012 1,701,400
Disposed 30/11/2012 2,000,000
Disposed 29/11/2012 2,000,000
Disposed 28/11/2012 3,000,000
Disposed 27/11/2012 3,000,000
Disposed 26/11/2012 2,400,100
Disposed 23/11/2012 2,917,000
Disposed 22/11/2012 3,495,800
Disposed 20/11/2012 4,000,000
Disposed 20/11/2012 4,000,000
Disposed 19/11/2012 2,500,000
Disposed 14/11/2012 2,609,800
Disposed 12/11/2012 15,900
Disposed 06/11/2012 681,300
Disposed 02/11/2012 1,250,000
Disposed 01/11/2012 1,000,000
Disposed 29/10/2012 100,300
Disposed 25/10/2012 137,000
Disposed 23/10/2012 850,000.
Disposed 22/10/2012 1,698,700.
Disposed 19/10/2012 2,788,300.
Disposed 18/10/2012 3,000,000.
Disposed 17/10/2012 2,821,700.
Disposed 16/10/2012 1,361,300.
Disposed 15/10/2012 1,326,700.
Disposed 12/10/2012 1,400,000.
Disposed 11/10/2012 1,410,700.

TUNE AIR
Acquired: From 15/10/12 till 30/11/12 44,080,000 units at 2.904 costing Rm128 million.

Sell on negative rumor, sell more on negative news.

If you're going to pick something to fall in love with, the last thing I'd chose is a stock. Stocks don't make good companions.

They have no loyalty. While they might reward you with a giant payday one year, they'll trash you in another.

Emotional attachment makes people do irrational things. That's dangerous when you're dealing with a stock that doesn't know you or care about you and can trash your net worth without a moment's hesitation.

When you're in love with a stock, you tend to ignore sound investment strategy and hang on longer than you should.

My advice? Stop looking at the stock as a lover and start looking at it like a wild animal that has been nice to you.

You should appreciate the great experience you've had. But remember that a stock, no matter how well you think you know it, can turn on you in a moment and do serious damage.

So folks, don't fall in love with a stock, no matter how sexy it is. A one-night stands is good enough!