We think Malindo's fares may be set much lower than AirAsia's as Lion employs the same funding strategy by using Indonesian domestic profits to subsidise its pre-emptive regionalisation strategy, wrote the analyst.

But Rusdi says that if we do not have a better cost base how could we offer low fares.

Share Price Performance dated 23-Nov-2012:

Month : High price (Date) : Low Price (Date)
1 mth : 3.080 (06-Nov-12) : 2.820 (23-Nov-12)
3 mth : 3.640 (29-Aug-12) : 2.810 (26-Sep-12)
12 mt : 3.940 (06-Dec-11) : 2.810 (26-Sep-12)

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

EPF
Latest: 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 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.

1. Yes, the result of our first quarter 2012 Airfare Survey is in, and two of the world's most renowned airlines, KLM & Qatar, turn out to be cheaper than AirAsia - even before any of its '+++' extras have been factored in.

2. Think about that for a minute. A skanky 'cut-price' budget airline - yes, we understand the irony in that label - is more expensive than a number of the best airlines in the world. How can shoddy AirAsia be more expensive?

3. Once you're hit by a few of those extras - that passengers get for free on any full-service luxury carrier - AirAsia [US$239] skyrockets to well above KLM [US$129] and Malaysian Airlines [US$207]. Still think AirAsia is cheap?

4. Why would you fly cattle class when you go 'first'? Forget about that, why fly with an airline renowned for leaving its passengers stranded? Here's an airline that is insolvent that will not - or can not - refund passengers after deserting them on the French, UK, India and NZ routes in 2011-12.

5. Let's try comparing apples with apples. We will level the playing field by showing the airfares to include the 'extras' that AirAsia charge for, but that don't show up in an initial head-to-head comparison of basic fares. Consider that renowned airline, Qatar Airways, is already cheaper Singapore to Bali than AirAsia, before they start piling in the added extras at hugely inflated prices. Why fly unsafe, badly maintained AirAsia, rather than luxury Qatar?

AirAsia has grown stronger over the years and is now one of Asia's biggest LCC.

But still, analysts argue that Malindo is going to adopt the same strategy that it did in Indonesia to win passengers in Malaysia by offering fares that are lower.

As such, Lion may not be the rational competitor AirAsia hopes for.

More than trying to be a keen competitor in what is already a well-penetrated Malaysia LCC market, we think Lion Air's intent behind its new Malaysia JV airline is to firstly dampen sentiment towards

AirAsia's regionalisation plan, and secondly to weaken the monopoly LCC position of AirAsia Malaysia,¿ wrote an analyst in his report.

tommylou: If you are buying an airline counter you should know what is this all about:

Posted by BullBear > Oct 24, 2012 10:51 AM 2). BUT AK DFO being reprimanded by DCA & AK AOC only renewed for 6 months…… is like the DFO is incompetent, the FO manual is obsolete & they don’t actually follow the FO manual.

Pity......Heheheheheheheh!!

Share Price Performance dated 22-Nov-2012:

Month : High price (Date) : Low Price (Date)
1 mth : 3.190 (19-Oct-12) : 2.850 (19-Nov-12)
3 mth : 3.640 (29-Aug-12) : 2.810 (26-Sep-12)
12 mt : 3.940 (06-Dec-11) : 2.810 (26-Sep-12)

Another new 1 month low today, folks! Now folks, only when the tide goes out do we discover who's been swimming naked....... Heheheheheheheheheh!!

In our view, Malindo's hybrid product offering is closer to MAS than AirAsia.

However, ticket prices will be lower or on par with AirAsia and we see Malindo's entry into Malaysia as breaking the airline duopoly.

Folks, below is my earlier posting this issue!



Posted by BullBear > Oct 24, 2012 10:51 AM | Report Abuse X

The writings are already on the wall.

These are very serious rumours.

1. The AK HQ obstructing the ATC tower is one thing.

2. BUT AK DFO being reprimanded by DCA & AK AOC only renewed for 6 months…… is like the DFO is incompetent, the FO manual is obsolete & they don’t actually follow the FO manual.

Careful now, folks!

Rusdi has promised ¿fares will be same or lower than competition¿ as competition will often lead to a drop in ticket prices.

But Malindo is not going to just compete on fares, it would provide larger seat pitch, light meals, in-flight entertainment and WiFi facilities and free baggage allowance.

Remember folks, Airasia take delivery of eleven (11) A320 aircraft in the FINAL QUARTER of the year. At END OF SEPTEMBER 2012 total debts was RM7.8 billion.

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

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.

EPF
Latest: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: 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. Wakakakakakakakakakak!!

Storm clouds in horizon for AirAsia? Heheheheheheh!!

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

We are going to see the land that we will lease from Malaysia Airports to build a training centre and also our headquarters. We will duplicate the centre like the one we now have in Jakarta, Rusdi says.

It will take time to build the facility but by mid next year the airline will move a simulator meant for Jakarta to KL so pilots can be trained here instead of going to Jakarta. Another simulator will be added if there is a need.

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

From 15 Oct 2012 till 21 Nov 2012 Tune Air has acquired 27,850,000 units at average price of Rm2.938 value 81,813,810.00 ringgit.

Folks, since the Q3 earning is good and the price is near the 1 month low why are the local & foreign funds still on the sideline? What about you, folks?

Share Price Performance dated 20-Nov-2012:

Month : High price- (Date) : Low Price (Date)
1 mth : 3.190 (19-Oct-12) : 2.850 (19-Nov-12)
3 mth : 3.640 (29-Aug-12) : 2.810 (26-Sep-12)
12 mt : 3.940 (06-Dec-11) : 2.810 (26-Sep-12)

Malindo will operate initially from KLIA and move to KLIA2 when it opens its doors on May 1 next year. KLIA2 is more than 60 per cent complete now.

Malindo is likely to take up 3,000 sq m to 4,000 sq m of space at KLIA2 once it starts operations. It is renting about 400 sq m of space at KLIA now.

After the Q3 earning will Tune Air acquire more share to beef up the price? Why aren't the local & foreign funds buying? Folks, minus the one time gain, actually AA 9 months period profit is down from previous year.

Folks, if minus the one time gain of Rm1,160,370,000.00 on the cumulative profit period ended 30/09/12, the profit is actually down as compared to the previous cumulative period ended 30/09/11.

30/09/12 - Profit after tax:
1,527,930,000-1,160,370,000= 367,560,000.00

30/09/11 - Profit after tax: 428,490,000.00

9 months profit lower by -Rm60,930,000.00

The fact is that AirAsia is going to face more competition in its home market with Indonesia’s PT Lion Mentari Airlines set to start low-cost flights in Malaysia next year.

Folks, Tune Air has been acquiring AA shares from 15/10/2012 till 21/11/2012. See detail below:

27,850,000 units at average price of Rm2.938 value Rm 81,813,810.00 to support this counter price.

EPF
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 S/B
Latest:Acquired 21/11/2012 3,700,000 at Rm2.850

Acquired 20/11/2012 4,150,000 at Rm2.856
Acquired 19/11/2012 3,950,000 at Rm2.884
Acquired: 09/11/2012 500,000 at Rm2.944
Acquired 08/11/2012 1,100,000 at Rm2.945
Acquired 06/11/2012 2,400,000 at Rm2.974
Acquired 24/10/2012 2,200,000 at Rm3.040
Acquired 18/10/2012 2,800,000 at Rm3.126
Acquired 16/10/2012 1,000,000 at Rm3.050
Acquired 03/10/2012 2,500,000 at Rm3.030
Acquired 05/10/2012 3,550,000 at Rm3.010

Any comment, folks?

Careful now, folks! What seems low and cheap generally goes lower. So folks, only when the tide goes out do you discover who's been swimming naked.

Folks, AirAsia Bhd's market value shed billion of ringgits after the entry of a low-cost carrier Malindo Airways.

Share Price Performance dated 20-Nov-2012:

Month : High price (Date) : Low Price (Date)
1 mth : 3.190 (19-Oct-12) : 2.850 (19-Nov-12)
3 mth : 3.640 (29-Aug-12) : 2.810 (26-Sep-12)
12 mt : 3.940 (06-Dec-11) : 2.810 (26-Sep-12)

Poor results after heavy investment usually ends in the manager being fired, but Queens Park Rangers boss Mark Hughes is set to be given more time to improve the fortunes of the Premier League's bottom club.

Fernandes missed the Southampton defeat as he was in the United States with his Formula One team Caterham, but he again took to Twitter after the match but this time with a more sober tone.

Next up for QPR is an away trip to Manchester United on Saturday followed by a visit to the Stadium of Light to take on Sunderland.

AirAsia Bhd Q3 will be released on Nov 21 2012. Fasten your seat belt, folks! Going north or south?

For a start, Malindo will hire 700 people, of which 100 will be pilots, 250 crew and the rest engineering and general support staff, says Malindo Air CEO Chandran Ramamuthy.

Chandran expects the airline to hire about 5,000 people over the next 5 years.

Besides creating jobs, there will be other spill off businesses in the travel trade. All points to more vibrancy in the economy. About 3,000 people attended Malindo's walk in interview on November 1 to 3 and of that about 600 pilots will be hired in stages, according to Chandran.

We are in the midst of finalising the recruitment of our senior management team,'' he added.

We (Malindo and Lion Grup) have the capacity to absorb up to 1,000 pilots given our growth plans and our plane orders, Rusdi adds.

Firefly now offers direct flights between Kuala Lumpur and Haikou, China under a scheduled-charter collaboration with Concept Holidays Sdn Bhd.

The Kuala Lumpur-Haikou connection was Firefly’s second scheduled-charter flight into China after its Kuala Lumpur-Nanning flights, which commenced in April.

Well if you believe that TP remain intact at 3.60 what are you waiting for? It's now trading at 2.85 - 2.86 that is at a discount of 0.75 cents, so buy more loh to average down your earlier purchase at a higher price loh! Who knows the price will rebound later mah!

Hahahahahahahaha!!

EPF
Latest: Disposed 14/11/2012 2,609,800
Latest: 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 S/B
Latest:Acquired 20/11/2012 4,150,000 at Rm2.856

Acquired 19/11/2012 3,950,000 at Rm2.884
Acquired: 09/11/2012 500,000 at Rm2.944
Acquired 08/11/2012 1,100,000 at Rm2.945
Acquired 06/11/2012 2,400,000 at Rm2.974
Acquired 24/10/2012 2,200,000 at Rm3.040
Acquired 18/10/2012 2,800,000 at Rm3.126
Acquired 16/10/2012 1,000,000 at Rm3.050
Acquired 03/10/2012 2,500,000 at Rm3.030
Acquired 05/10/2012 3,550,000 at Rm3.010

In the business world, the rearview mirror is always clearer than the windshield. Buy on fear, sell on greed.

Folks, without Tune Air buying what is the fair value for AA? Well your eyes will also drop like the share price without the owner support!

Careful now. How much more can they absorb the beating? Wakakakakakakakak!!

For a start Rusdi is talking about having two aircraft that are meant for Batik Air to be diverted to Malindo, and each month onwards Malindo will add two more to get 12 next year and in 10 years, Malindo is projected to have 100 aircraft. By then, it would have covered much of Asia and perhaps even gone beyond Asia when five Dreamliner aircraft are channelled to Malindo.

Since the focus is to grow Malindo, Batik will take a back seat and the launch has been delayed to second half of 2013. Malindo will be Lion's international arm while Batik will be a full service carrier for the domestic Indonesian market and Wings Air flies the ATR type of aircraft and ply the very remote routes as a feeder service to Lion Air's trunk routes.

Lion Air has been profitable from its first day of operations and today, together with Wings Air, control 50 per cent of Indonesia's domestic air passenger market.

Lion Air estimates it will ferry 30 million passenger this year and 35 million next year. Garuda International holds 23 per cent of the domestic market share and AirAsia 2.2 per cent.

We plan to fly from our west hub into KL and east hub to Kota Kinabalu, and the traffic is about the same for both the hubs. Malindo will offer 500,000 to 600,000 seats in the first year, Rusdi says, adding that Malindo will have hubs in KLIA2 and Kota Kinabalu.

Hence, he is not so worried about traffic and not so focused on the Malaysian traffic. He feels Indonesian traffic will fill his planes.

Rusdi says GDP growth in Indonesia last year meant about 35 million people joined the middle class, and it is this group that is keen to travel. No doubt Lion Air now flies to Singapore, Malaysia, Vietnam and Saudi Arabia, but routes are limited and it is predominately a domestic carrier.

We fly to 69 cities within Indonesia from our eight hubs and have more than 600 take-offs and carry over 100,000 passengers a day. Anyone that lives in Medan, Balik Papan, Pekanbaru or even Surabaya has to go to Jakarta now to go abroad, and that would cost them more in air fares and take more time.

So the main purpose is to make either Singapore or Malaysia a gateway to carry Indonesian passengers onward. Now we have Malindo, which is going to be our gateway to fly to KL and beyond, Rusdi says.

For Rusdi, the entry to Malaysia is about providing Indonesians with a window to the world.

Jakarta is now the main hub for travellers in Indonesia, that geographically has 1,750 islands. For some islands, the only link is by air. Being the fourth most populous country in the world, its growing middle class is travelling more than before.

Share Price Performance dated 19-Nov-2012:

Month : High price (Date) / Low Price (Date)
1 mth : 3.190 (19-Oct-12) / 2.860 (19-Nov-12)
3 mth : 3.640 (29-Aug-12) / 2.810 (26-Sep-12)
12 mth: 3.940 (06-Dec-11) / 2.810 (26-Sep-12)

Folks, creating another lower low for the 1 month price performance. Careful now!

Whatever the analysis, the real test would be when Malindo takes to the skies. But Malaysia may not be Rusdi's only stop; the region is his playground now.

It depends on which country or government that wants to support us. We just want to do business, not lobby or try to provoke, he says.

Lion may be better positioned than AirAsia to achieve regional dominance, even though AirAsia has a headstart.

Lion has access to a larger hinterland and a faster growing market Indonesia to generate cash flows to fund its regionalisation strategy compared with AirAsia, which has primarily funded its regionalisation plans from its Malaysian operations.

While Lion has a smaller fleet than AirAsia, all its aircraft are based in Indonesia, which may allow it to generate strong cash flows vs AirAsia, which has only half its fleet in Malaysia.

The market has also not fully appreciated the impending entry of Lion Air into the regional low cost carrier space.

We reviewed publicly available information on Lion Air and conclude that it has a fair chance of realising its regionalisation plans, putting it in direct competition with AirAsia in the pursuit of Asian LCC market dominance, the analyst says.

Lion has ordered 381 aircraft, both narrow and wide body including the Dreamliner and AirAsia over 300. Tiger Airways and Jetstar also have orders but doesn't come close to what AirAsia and Lion Air have committed to.

Malindo has not begun flying and many do not see it as a real threat in the region. But those who know how Lion operates would not think so.

Lion has been able to control 50 per cent of the domestic market share in Indonesia by flying the most number of routes, totalling 69 for now, and beats the competition with the lowest fares.

Remember folks, this time it's different. Yesterday Tune Air bought 3,950,000 units at Rm2.884 while total volume traded was 7,288,100 units.

Too much supply than demand. Big local & foreign funds were the main seller. Careful now!

Careful now, folks! Don't try to catch falling knives, but be sure to pick them up after they hit the floor.

Remember, there are two primary approaches to investing: fundamental analysis and technical analysis. We generally fall into the fundamental camp, since we evaluate stocks based upon their valuations, rather than looking primarily at their short-term price movements. We take this direction because we believe this provides the greatest potential for long-term success.

It is quite simple - buying a stock that is in mid-fall is not a pleasant experience, folks!

Lion Air and AirAsia are two carriers that have placed large numbers of aircraft from Boeing and Airbus respectively and they come with very aggressive delivery schedules.

Both airlines have strong support from their respective aircraft manufacturers, and are able to access financing from export credit agencies.

The aggressive order book delivery schedules of Lion Air and AirAsia put them squarely at the forefront in the fight for Asian LCC dominance, says an analyst in his report.

For more than a decade, Lion Air Indonesia's largest privately-owned airline focused solely on the Indonesian market, carrying passengers and feeding those passenger to other carriers because it had too few rights to fly international routes.

It was going to launch Batik Air in March for its international operations because it needs the regional extension, but since setting up Malindo, the strategy has changed. Malindo will be Lion's launchpad into the region.

This is the same strategy AirAsia, Jetstar and Tiger Airways have employed, first focusing on the home market. Those airlines later set up ventures in other countries, thereby giving them a bigger market.

This time is different. Playing with fire will get you burned. You have been warned!

Malindo will take off earlier than planned, in mid-March instead of May and two weeks ago invited candidates to join the company.

Around 3,000 people jostled for an interview to secure a job with the fledgling airline. Rusdi has promised to hire up to 600 of the 1,000 unemployed pilots in the country.

It is good to remain unknown and that is why I avoid publicity, but I want people to know that I am serious about our venture in Malaysia and about employing pilots. It is not just an empty promise and we will offer fares same or lower than the competition, he says.

What Rusdi saw was an opportunity to do business in Malaysia. It is an expansion for the Lion Group.

Rusdi is not the normal airline boss who will present papers at conferences or be seen at airline events, wrote Maybank Investment Bank in a report.

However, this man and Lion Air shot into the limelight when he stood next to US President Barack Obama to sign a record 230 aircraft order with Boeing in February. It was the first time an airline has placed such a big order.

Folks, in the cut-throat airline business, one wonders if there is space for a third airline to operate out of Malaysia but Rusdi sees it from another perspective.

He feels Malindo will be the bridge for all 240 million Indonesians who want to travel to the rest of Asean and the world.

Folks, a regional expansion is inevitable since there is a growing market for low cost travel in Asia.

A courtship with Berjaya Air and Firefly fizzled out after two attempts but Rusdi eventually found a partner in little known Tan Sri Ahmad Johan of National Aerospace and Defence Industries Sdn Bhd (Nadi) to set up Malindo Air.

EPF

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. Total day volumw traded: 5,687,000
Disposed 22/10/2012 1,698,700. Total day volume traded: 6,984,700
Disposed 19/10/2012 2,788,300. Total day volume traded 10,733,400.
Disposed 18/10/2012 3,000,000. Total day volume traded 14,517,400
Disposed 17/10/2012 2,821,700. Total day volume traded 11,606,600
Disposed 16/10/2012 1,361,300. Total day volume traded 13,121,600
Disposed 15/10/2012 1,326,700. Total day volume traded: 4,404,700
Disposed 12/10/2012 1,400,000. Total day volume traded: 7,435,300
Disposed 11/10/2012 1,410,700. Total day volume traded: 3,838,300


Tune Air S/B
Latest: Acquired 19/11/2012 3,950,000 at Rm2.884

Acquired 09/11/2012 500,000 at Rm2.944
Acquired 08/11/2012 1,100,000 at Rm2.945
Acquired 06/11/2012 2,400,000 at Rm2.974
Acquired 24/10/2012 2,200,000 at Rm3.040
Acquired 18/10/2012 2,800,000 at Rm3.126
Acquired 16/10/2012 1,000,000 at Rm3.050
Acquired 03/10/2012 2,500,000 at Rm3.030
Acquired 05/10/2012 3,550,000 at Rm3.010

Folks, seem that Tune Air is the only keen buyer while the local & foreign funds are keen seller. Even with Tune Air buying the stock price still closed at lower price. Reason because there are more supply than demand.

It's only when the tide goes out that you learn who's been swimming naked.

This time is different! Don't touch this counter! You have been warned!

Yields are set to decline and profit contribution from AirAsia's biggest market will recede!