OSK Research has maintained its "buy" call on AirAsia with a target price of RM4.10???????????

What a joke!! Wakakakakakakakakakak!!!

Folks, minus the one time gain the nine months profit is lower by -Rm60,930,000.00 from previous year.

Worse still Malindo’s efforts will nevertheless hurt AirAsia’s profitability for year 2013!

As the Malindo newsflow rolls in, there will be limited share price catalysts in the near term.

Hahahahahahah ...... without Tune Air buying aggressively rm2.60 will be history already!

Wakakakakakakakakakakakak!!

With Malindo Airways entry, yields are set to decline and profit contribution from Airasia's biggest market will recede!

Airasia's cost advantage has narrowed with the entry of Malindo Airways.

Malindo Airways has an advantage in its cost structure as its new generation Boeing B737-900s will have a seating capacity of 220, compared with AirAsia's 180 seats.

Nonetheless, competition is good for consumers and will further stimulate the demand for low-cost travel.

Folks, while the reasons for Tune Air’s upping its stake in AirAsia are NOT KNOWN, the latter’s share price has fallen 25% from its 11-month high of RM3.82 on July 9 to RM2.85 yesterday.

The most recent purchase was made last Tuesday. As at press time, Tune Air acquired an additional 3.75 million shares at RM2.85 per share, after acquiring 4.15 million shares at the same price the day before.

Apart from their indirect stake held via Tune Air, Fernandes and Kamaruddin also hold direct stakes of 0.12% and 0.08% respectively in the low-budget carrier.

http://anotherbrickinwall.blogspot.com/2011/01/airasia-skidded-off-runaway.html

According to Bursa Malaysia filings, Tune Air has been accumulating shares in the low-cost carrier since Sept 27, purchasing over 50 million shares at prices between RM2.85 and RM3.12 per share.

Tune Air Sdn Bhd, have been steadily building up their stake in AirAsia Bhd from 23.06% at end-September to 24.91% currently, as competition is heating up with the coming of low-cost carrier rival Malindo Airways.

SpiceJet, India's second-biggest budget carrier by market share, reduced its second-quarter losses by 32 percent, benefiting from massive cuts in capacity by rival Kingfisher Airlines.

The losses still reflect the fiercely competitive aviation industry, which lost a combined $2 billion last year. All but unlisted IndiGo lost money, hurt by high state taxes on jet fuel, expensive airports and regulatory uncertainty.

"Fuel costs and a weakened INR continue to be a cause of worry for the aviation sector," SpiceJet Chief Executive Neil Mills said in a statement.

Kingfisher has stopped flying since having its licence suspended last month because of safety concerns. Even before then the carrier operated only about a fifth of its aircraft, enabling rivals to push up fares.

SpiceJet said it lost 1.64 billion rupees in the three months to September 30, compared with a forecast loss of 961 million rupees and after a 2.4 billion rupee loss in the same period last year.

Accumulated losses were more than the company's net worth at September 30, its auditors said on Monday.

As Malindo Airways' scale of operations grows, competition between the two airlines will only intensify.

Airasia's market value shed billion ringgit after the entry of a low-cost carrier Malindo Airways.

For MAS, joining the oneworld alliance is also a move that allows it to fill its aircraft with passengers from other airlines.

The spill-over benefits will be a plenty, it is up to those in the travel trade to act now.

If they do not, then other players from neighbouring countries will set up shop here to take advantage of that.

Wakakakakakakakakakakak!!

But how do we strategise so that our neighbouring countries don't take more than what they should?

Folks, the licence given to Malindo to operate will give the local market more choices.

In 2008, Malaysia and Singapore ended the duopoly by MAS and Singapore Airlines on the much protected KL-Singapore route. Last year the capital cities skies were open to competition.

Now the last bastion a fully liberalised environment in Asean for air travel.

The net effect - better air links and more frequencies.

It has not been an easy journey to get all the governments to agree given the disparities and considerations, but if Asean is to move as a single block, the opening up of the air sector to competition is a key step forward.

Folks, there has been progress.

The whole idea of a single aviation market in Asean started nearly 20 years ago. It simply means governments across Asean are relaxing control on air transport.

Malindo is hiring pilots and crew to start services so that by 2015 it would have a sizeable market. And in Thailand, U Airlines, that took off in September, has joined the fray.

AirAsia announced recently that it would order 100 more aircraft to prepare itself for the onslaught of open skies and MAS is working out strategies to stay relevant in a tough environment.

1. The Group’s total debt as of END OF SEPTEMBER 2012 was RM7.8 billion. The borrowings are mainly in the form of term loans which are for the purchase of new Airbus A320-200 aircraft.

2. The Group will take delivery of eleven (11) A320 aircraft in the FINAL QUARTER of the year.

3. AirAsia Philippines recorded a net loss of RM25.6 million in the quarter. As the Group’s interest in AirAsia Philippines has been reduced to zero, no further losses will be recognized.

4. AirAsia Japan recorded a net loss of RM33.9 million in the quarter of which RM16.6 million is equity accounted in the AirAsia Berhad income statement.

5. No dividends were declared or approved in the quarter ended 30 September 2012

Many of the airlines are already taking steps to cut cost and upgrade their products so that they will win big in the race.

1. Malaysia Airports has offered 10 acres of land to Malindo near KLIA2 for its office building and a training centre.

2. The land that we will lease from Malaysia Airports to build a training centre and also our headquarters.

3. Besides AirAsia, Malindo and Lion Air, KLIA2 will have other tenants such as Zest Airways, Tiger Airways, and Cebu Pacific Air.

Folks, minus the one time gain the nine months profit is lower by -Rm60,930,000.00 from previous year.

There is a fundamental problem with the sector's players. "It is not that higher aviation turbine fuel is the only factor making airliners bleed.

Airline business cannot be run because of promoters’ ego, they need to find a solution to the crisis and not plead to the government.

When asked if cheaply available airline stocks were a good buy, he warns: “Absolutely not. Investors better stay away from the counter, as the companies do not have any commercial principle.”

When an investor does not know how to evaluate a company, as various parameters to access the growth remain unanswered, why would one put money on the counter, experts ask.

The players that can offer reasonable air fares, better quality of services and more frequencies will be the choices for the travellers that are price-conscious.

The players are always running specials and price promotions to undercut one another. The airline industry is incredibly competitive and airline companies struggle just for survival.

Players are always running specials and sales to try to fill their planes and turn a profit.

Massive debt, no economic moat, high costs, low margins, extremely competitive….the airline industry checks off just about every box that a bad investment has.

AirAsia, AirAsia X, Malaysia Airlines (MAS), Firefly and Malindo Air will be around at that time, but joining them will be all the other Asean carriers which are fighting for the same passengers.

Asean will implement the open skies policy in 2015 and that means travellers will have more choices when flying across the 10 nations of the grouping.

Don’t be tempted to get on board the wealth-destruction machines. A dollar invested in Qantas five years ago would now be worth 39¢; in Virgin Blue it would now be worth less than 24¢.

If you haven’t already heard what the world’s greatest investor Warren Buffett once said about the notoriously treacherous area of airline stocks, you should hear it again before reading further: “I have a 1800 number now that I call if I get the urge to buy an airline stock. I call at two in the morning and I say; 'My name is Warren I’m an aeroholic.’ And then they talk me down.”

A report says Lion Air and AirAsia are expanding their combined fleet by 17-20 per cent per year over the next three years, which may exceed the industry demand growth of about 15 per cent per annum.

Consolidation is inevitable as smaller country focused airlines without a dominant market share become attractive targets for regional-focused airlines keen to expand market share and gain access to limited airport slots.

An analyst said that he doubts Jetstar and Tiger will become leaders in the Asian LCC industry in their own right (because of their own reasons), and he feels the real fight for dominance will be between Lion Air and AirAsia.

EPF
Latest: 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 from 15/10/12 till 27/11/12:

Acquired: 39,390,000 units at Rm 2.911 costing Rm114,660,950.00

Folks, what seems low and cheap generally goes lower! Heheheheh!!

Massive debt, no economic moat, high costs, low margins, extremely competitive….the airline industry checks off just about every box that a bad investment has.

The only thing I can think an airline company has going for it is the high barrier to entry. Don't believe, ask Buffet on aviation stocks!

Better buy more now to average down your higher prices loh! Follow Tune Air mah! Wakakakakakakak!!

Reason 2: High Fixed Costs

Airlines are burdened with high fixed costs and have variable revenues. Airlines spend a lot of money on labor costs, maintenance, and keeping up with new regulations.

Airline costs are fixed whether a plane has a high occupancy rate or a sparse number of passengers.

The airline industry benefits when it has a high occupancy rate and suffers when the rate drops.

One of the biggest burdens for air lines is higher fuel prices. Jet fuel does not come cheap and airlines see their margins shrink when fuel prices rise.

Airlines have tried to find some cost certainty with fuel hedging. Fuel hedging has gotten a whole lot more expensive for airline companies over the past few years.

Reason 1: Heavy Competition

Airline companies are always running specials and price promotions to undercut one another.

The airline industry is incredibly competitive and airline companies struggle just for survival.

Airlines are always running specials and sales to try to fill their planes and turn a profit.

There have been countless mergers and takeovers in the industry due to many airlines being unable to maintain profitability.

It only takes one bad quarter or public relations snafu for an airline to find itself on the verge of financial ruin.

AA is starting to pop up on the must buy lists of many Investment Banks and Research Houses.

They are predicting a revival in the airline industry due to increased operating efficiency of many carriers and the low stock prices.

While airline stocks may look like a bargain to many investors, the truth is they are still way too expensive. What the reasons, folks???????

Time to start buying ................ ???

Folks, we simply attempt to be fearful when others are greedy and to be greedy only when others are fearful. So which one are you?

Heheheheheheheheheh!!

Total acquired by Tune Air from 15/10/12 till 27/11/12:

39,390,000 units at Rm 2.911 costing Rm114,660,950.00

Without Tune Air buying, the share price will be much much much lower!
In this business if you're good, you're right six times out of ten. You're never going to be right nine times out of ten.

Heheheheheheheheheheh!!

Share Price Performance dated 27-Nov-2012:

Month : High price -(Date) : Low Price (Date)
1 mth : 3.080 (06-Nov-12) : 2.800 (27-Nov-12)
3 mth : 3.510 (04-Sep-12) : 2.800 (27-Nov-12)
12 mt : 3.940 (06-Dec-11) : 2.800 (27-Nov-12)

Only when the tide goes out do you discover who's been swimming naked.

EPF
Latest: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
Latest: Acquired 27/11/201 3,180,000 at Rm2.845

Acquired 26/11/2012 2,360,000 at Rm2.839
Acquired: 23/11/2012 6,000,000 at Rm2.850
Acquired: 15/10/12 till 21/11/12 27,850,000 at Rm2.938 value Rm 81,813,810.00

Buy on fear, sell on greed!

Share Price Performance dated 26-Nov-2012:

Month : High price-(Date) : Low Price (Date)
1 mth : 3.080 (06-Nov-12) : 2.810 (26-Nov-12)
3 mth : 3.640 (29-Aug-12) : 2.810 (26-Nov-12)
12 mt : 3.940 (06-Dec-11) : 2.810 (26-Nov-12)

Only when the tide goes out do you discover who's been swimming naked.

The aggressive pre-emptive strike against Lion Air could cause negative returns in the near-term.

As such an analyst has cut AirAsia's earnings per share forecasts for 2013 and 2014 to factor in this aggressive stance.

“We cut out core EPS forecasts by 14% for 2012,” said an analyst.

The expansion for next year would be the highest ever in AirAsia's history in terms of the number of aircrafts.

“While it is a strategic long-term move against Lion Air's regional ambitions, it could cause yields to deflate faster than we had anticipated,” an analyst said.

Don't worry as Tune Air will buy more share to support the price! Heheheheheheheheh!!

Malaysian budget carrier AirAsia Berhad has dismissed speculation that it is bidding for struggling airline SpiceJet Ltd.

"AirAsia rejects the speculation surrounding our possible expansion in India. These reports are completely incorrect," AirAsia Group CEO Tony Fernandes said in a statement.

"AirAsia has not submitted a bid for the Indian budget carrier, and has no intention of doing so," he added.

EPF
Latest:Disposed 21/11/2012 2,000,000

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
Latest: Acquired 26/11/2012 2,360,000 at Rm2.839

Acquired: 23/11/2012 6,000,000 at Rm2.850
Acquired: 15/10/12 till 21/11/12 27,850,000 at Rm2.938 value Rm 81,813,810.00

Buy on fear, sell on greed.

We can do that because our aircraft are new and they do not need a lot of maintenance but if they are old, maintenance cost is higher and that adds into airline cost, Rusdi says.

He reiterates that the maximum flying range of his aircraft is between five and six hours because they have extended range and it is due to all these factors that they can offer better fares than the competition.

Rusdi says he is able to offer low fares because Lion Air operates a new fleet and there are manufacturers' guarantees.

It's like a honeymoon period, and we also fly our aircraft an average of 14 to 16 hours a day (versus the competition which is 10-12 hours) and that means we are getting better utilisation of our aircraft versus many other airlines.