Qantas (Australia's largest and most prominent airline) Forecasts Biggest Ever Profit From Increased Flying And More Aircraft

1. Qantas is upgrading its forecast on its profit to between AU$2.425 billion and AU$2.475 billion (from $1.625 - $1.658 billion) in the financial year ending June 30th, 2023.
2. The airline's profit is being driven by continued strong demand and the completion of its three-year recovery program.
3. Qantas will be operating domestic capacity at 104% of pre-COVID levels by the end of FY23 due to the return of lucrative travel on the Golden Triangle routes between Melbourne, Sydney and Brisbane.

Read here:
https://simpleflying.com/qantas-biggest-profit-increased-flying-more-aircraft/

This big investment from institutional player is a sign that PN17 Uplift Is Near.

It can be 3 months, or 12 months. Why? Bcos the funds must have done a lot of due diligence. U think so easy fund can approve RM50 million to invest in a PN17 company share? Lots of meeting and justification and paper work needed ! They have done the check that PN17 uplift is a real possibility only willing to invest RM50 million. This is not your RM5000 or RM50,000 but RM50,000,000.

Ryanair (Europe biggest airline by market cap) rebounds to near-record profit as summer bookings soar

1. Ryanair made a near-record profit of €1.4 billion in 2022.

2. The airline expects to make even more profit in 2023, thanks to a surge in summer bookings.

3. Ryanair plans to add 50 new aircraft to its fleet in 2023, which will allow it to carry more passengers than ever before.

https://www.theguardian.com/business/2023/may/22/ryanair-profit-summer-bookings-aircraft

Philippine Airlines Posts Q1 $135 Million Operating Income
BY MICHAEL DORAN

1. Philippine Airlines (PAL) posted a Q1 operating income of $135.2 million and a total comprehensive income of $108.2 million, which is a significant improvement from the same period last year.

2. Passenger numbers grew by a staggering 156% compared to the same time last year, with PAL carrying 3.4 million customers in the first quarter. This is a sign of the strong demand for air travel as COVID-19 restrictions continue to ease.

3. PAL is well-positioned to continue to grow and succeed in the years to come. The airline has a strong financial position, a loyal customer base, and a network that spans the globe.


Full news here:
https://simpleflying.com/philippine-airlines-post-135-million-income/

Water demand increase in Johor by 50 million litres a day according to Suruhanjaya Perkhidmatan Air Negara (SPAN).

Spritzer is well-positioned to benefit from the increased demand for bottled water, and its share price could rise as a result.

https://www.msn.com/en-my/news/berita/cuaca-panas-penggunaan-air-di-johor-meningkat-50-juta-liter-sehari/ar-AA1bloXr?ocid=entnewsntp&pc=U531&cvid=3e77d48595b54eadb9bef2e99b5a4707&ei=63

Airline Business Index shows industry close to 2019 size amid soaring revenue

By Lewis Harper
18 May 2023

The latest Airline Business Index shows the global airline industry’s revenue soared even further above 2019 levels in the first quarter of 2023, as the sector moved to within touching distance of its pre-Covid size.

https://www.flightglobal.com/airlines/airline-business-index-shows-industry-close-to-2019-size-amid-soaring-revenue/153327.article

3 Key Points

1. Singapore Airlines (SIA) reported a record annual profit of S$2.16 billion (US$1.63 billion) in 2022, reversing three straight years of losses.

2. The profit was driven by a strong recovery in passenger demand, as well as cost-cutting measures implemented by the airline.

3. SIA's shares soared to their highest levels in more than three years on Wednesday, May 17, 2023, as investors cheered the strong results.

Full news here:
https://www.channelnewsasia.com/business/singapore-airlines-sia-shares-soar-more-3-year-high-record-annual-profit-3494416

AAX very likely to register EPS better than 4Q since their passenger volume surge 49% Quarter-to-Quarter in 1Q 2023

Cebu Pacific (Philippine low-cost airline offering domestic and international flights) swings back to profit in 1Q 2023!

Cebu Pacific returned to the black in its first quarter earnings, helped by a strong rebound in passenger revenues, as it anticipates returning to pre-pandemic international capacity by end-June.

https://www.flightglobal.com/airlines/cebu-pacific-swings-to-first-profit-since-pandemic/153159.article

China Ditches PCR Test Requirements For Inbound Travelers

China has revealed it will scrap its PCR test requirement for inbound travelers at the end of the month. Passengers will only need to show a negative rapid antigen test result from April 29th.

Read it here:
https://simpleflying.com/china-drops-inbound-traveler-pcr-test-requirement/?newsletter_popup=1

This is positive news to AAX as it is now much easier for people to travel to China!
1st Quarter superb result (due in 10-15 days may be just the beginning...)

How much is Spritzer worth? Come come and check here...

https://klse.i3investor.com/web/blog/detail/bestStocks/2023-05-15-story-h-270619056-Spritzer_Target_RM3_30_38_upside_HEAT_WAVE_to_drive_mineral_water_sales

Japan’s Biggest Airline Company By Market Cap (ANA) Turns First Post-Pandemic Annual Profit

All Nippon Airways beat profit expectations during the fiscal year ending in March as travelers eagerly returned to Japan.

Tokyo-based ANA said inbound international travel demand increased “dramatically” in the fourth quarter. This helped propel its full year operating profit 120 billion Japanese yen ($875 million), and operating margin to 7 percent. In February, ANA forecast a roughly 90 billion Japanese yen operating profit and margin of around 5.6 percent. The airline reported a net profit of 90 billion Japanese yen for the year ending in March.

Full news here:
https://airlineweekly.com/2023/05/japans-ana-turns-first-post-pandemic-annual-profit/

Last time I mentioned ...

Waiting for 2 good news now:
1. Approval for extension of regulatory plan somewhere this week. (Turned out to be true but late for 2 weeks)
2. Superb earnings in end May. (Wait for 2-3 weeks then we shall see)

Superb earnings forecast remain intact.
Waiting for more upside ahead !

In short, EY the big four accounting firm OK with AAX account for 2022

From Bursa announcement on 2nd May

For the shareholders’ information, Ernst & Young PLT, being the Company’s external auditors for the financial period ended 31 December 2022 (“FYE2022”) have signed off the Company’s audited financial statements for FYE2022 without any qualification.

Yes, that could be the reason why AAX delay the restructuring plan announcement to July.

Because in 3 weeks time, after announce the superb 1Q 2023 quarter, the accounts will look much better than now.

It is easier to get Bursa approval on the restructuring plan with a much better accounts for both AAX and CAPITAL A.

AAX has RM182 million in cash and only RM50 million in immediate liabilities to be paid within a year.

Moreover, the company can also generate its own cash flow.

Read this for the debt restructuring which clearly state that debt has been reduced.

Page 16, Annual Report 2022:

Total liabilities reduced significantly to RM2.7
billion (2021: RM35.5 billion) as a direct result of
the Debt Restructuring exercise executed by the
Company.

Wah, earnings drop 49% or almost half compared to last quarter.

International travel jumped 69% year-on-year in March 2023 against March 2022, according to International Air Transport Association (IATA).

Air travel records strong demand growth in March 2023, says IATA

KUALA LUMPUR (May 4): Air travel recorded a strong demand growth for March 2023, rising 52.4% in total traffic as measured in revenue passenger kilometres, or RPKs, compared with March 2022, the International Air Transport Association (IATA) said.

“Domestic traffic for March rose 34.1% compared to the year-ago period. Total March 2023 domestic traffic was at 98.9% of the March 2019 level,” it said in a statement on Thursday (May 4).

It said international traffic climbed 68.9% versus March 2022, with all markets recording healthy growth, led once again by carriers in the Asia-Pacific region.

https://www.theedgemarkets.com/node/665619

AAX no burden from digital venture as it is pure aviation.
Capital A digital venture still making loss that's why limits overall group profit upside.

If MAS can stage a huge turnaround, imagine what AAX can do for its upcoming result in about 20-25 days time.

Huge Turnaround: Malaysia Airlines Goes From $173 Million Loss To $125 Million Profit

It was one of the best-ever quarter performances posted in the past two decades.

The Malaysia Aviation Group posted a significant financial turnaround, with last year's operating profit of approximately RM556 million ($125 million) effectively reversing the RM767 million ($173 million) operating loss reported in 2021. The return to profitability was also despite higher fuel prices, labor costs, and a weaker currency.

https://simpleflying.com/malaysia-airlines-turns-huge-2022-loss-2023-profit/

I will repeat this again, Tony already no longer CEO of AAX since few months ago in November. So no issue of abandoning ship at AAX.

https://www.thestar.com.my/business/business-news/2022/11/01/fernandes-steps-down-as-aax-ceo

Latest management of AAX as below.

http://www.airasiax.com/management.html

https://newsroom.airasia.com/news/aax-1q20223-ops-stats

AAX passenger traffic jumped 49% in 1Q2023 against 4Q2022!

https://www.thestar.com.my/business/business-news/2023/04/28/airasia-x-passenger-traffic-jumps-49--in-1q

KUALA LUMPUR: AirAsia X Bhd (AAX) carried 504,476 passengers in the first quarter (1Q23), up 49% from 337,638 passengers in the fourth quarter of 2022, driven by the New Year holidays and spring season travel demand.

The carrier, in a statement, said the impressive performance was on the back of increased seat capacity which grew by 47% quarter-on-quarter (QoQ) to 630,069 seats while available seat kilometres (ASK) surged by 71% to 2,899 million.

“This quarter, an extensive focus continued for fleet reactivation supporting the ramp up of flight frequencies across AirAsia X’s core network.

“AAX relaunched more destinations catering to strong demand, now serving scheduled flights to Osaka, Busan as well as Shanghai, besides increasing its services to fly seven times weekly to Tokyo,” it said.

While u all still quarrel over whether Tony will leave (when I repeat so many times he is no longer CEO of AAX), AAX announced the superb passenger volume. Up 49% in Q1 against Q4 last year.

Focus on what matters...

Why airfares are so expensive and likely to remain that way

https://www.thestar.com.my/aseanplus/aseanplus-news/2023/04/27/why-airfares-are-so-expensive-and-likely-to-remain-that-way

Even French President knows that China aviation reopening is real and seize the opportunity! News as below.

During a French state visit to China, Airbus signed new cooperation agreements with China Aviation industry partners.

Witnessed by Chinese President Xi Jinping and French President Emmanuel Macron, Airbus CEO, Guillaume Faury signed with the Tianjin Free Trade Zone Investment Company Ltd., and Aviation Industry Corporation of China Ltd., an agreement to expand A320 Family final assembly capacity with a second line at its Tianjin site. The agreement will contribute to Airbus’ overall rate objective of 75 aircraft per month in 2026 throughout its global production network.

https://www.airbus.com/en/newsroom/press-releases/2023-04-airbus-and-china-aviation-industry-sign-next-phase-in-partnership

Waiting for 2 good news now:
1. Approval for extension of regulatory plan somewhere this week.
2. Superb earnings in end May.

Target of RM3.36 if they can register sustainable EPS of 28 sen per quarter.

OK, it is good to remind again that Tony already no longer CEO of AAX since few months ago in November. So no issue of abandoning ship at AAX.

https://www.thestar.com.my/business/business-news/2022/11/01/fernandes-steps-down-as-aax-ceo

Latest management of AAX as below.

http://www.airasiax.com/management.html

https://www.thestar.com.my/business/business-news/2023/04/20/recovery-in-china-domestic-aviation-sector

China aviation continues to recover. This bodes well for AAX.

Waiting for 2 good news now:
1. Approval for extension of regulatory plan somewhere this week.
2. Superb earnings in end May.

Target of RM3.36 if they can register sustainable EPS of 28 sen per quarter.

If Tony wants to run, then will quietly leave instead of telling the whole world first... The plan is to get a successor to run aviation. He wants to chase the digitalization dream via CAPITAL A. Aviation business get someone else to run.

By the way, Tony already have new CEO for AAX since Nov-2022.

https://www.thestar.com.my/business/business-news/2022/11/01/fernandes-steps-down-as-aax-ceo

Benyamin Ismail is the CEO of AAX currently

http://www.airasiax.com/management.html

Savvy Hong Kong fliers say book early as air ticket prices surge by 15 to 40 per cent, unlikely to drop any time soon

With demand outstripping supply of seats, ticket prices are considerably higher than before pandemic
Shortage of airport workers blamed for preventing some airlines from resuming, expanding flights

https://www.scmp.com/news/hong-kong/hong-kong-economy/article/3218000/savvy-hong-kong-fliers-say-book-early-air-ticket-prices-surge-15-40-cent-unlikely-drop-any-time-soon?module=perpetual_scroll_0&pgtype=article&campaign=3218000

I foresee two good news in the near term:
1. Superb earnings in 1 month time (AAX to release result by end-May).
2. Approval by Bursa on its regulation plan extension (should be out this week).

Target of RM3.36 is still insight assuming AAX deliver core EPS of 28 sen for May result quarter.
This is using 3x PE which is already so low, usually airlines PE is 5x to 7x.

I think Bursa will extend because the aviation industry is improving. Somemore tourism is an important industry to Malaysia with huge economy multiplier.

AAX and Capital A employs a lot of people in Malaysia.

MAHB expects to welcome more airlines after 125% jump in 1Q passenger traffic

https://www.theedgemarkets.com/node/663995

Wah, more than double passenger travel volume in Q1 2023 for Malaysia Airports. Surely AAX business volume also surge at least same or more than that !

Looking ahead to superb Q1 2023 result !

https://www.youtube.com/watch?v=PRKVizPH2-w

good video describing Spritzer fundamental

take profit before Raya, end of strong run.

Aviation sector is recovering that is for sure. Read this news.

Flight Friday: How Are The U.S. 'Big 4' Airlines Faring Compared To 2019?

American Airlines: From January 2023, American has been operating more flights than the equivalent month from 2019, and flights have tracked very closely to 2019 numbers since.

Delta Air Lines: Delta has yet to operate the same number of flights compared to the same month in 2019, however they are operating in the upper 90% range and should surpass 2019 numbers in the coming quarter.

Southwest Airlines: Southwest have been operating at over 100% since August 2022, due to their strength in the U.S. domestic market. The only blemish is December 2022, with the well-publicized computer issues that Southwest faced during the month.

United Airlines: United surpassed 100% flight as of the start of the 4th quarter of 2022 and has remained above that number. Of all the “Big 4,” United leads in terms of number of flights when compared to its 2019 figure.

Source: https://aviationweek.com/air-transport/flight-friday-how-are-us-big-4-airlines-faring-compared-2019

Chinese Airlines Overwhelmed With Cabin Crew Applications

Source:
https://simpleflying.com/chinese-airlines-overwhelmed-cabin-crew-applications/

My target of RM3.36 using 3x PE is intact assuming AAX can maintain their core EPS at least 28 sen registered in 4Q2022.

Stable dividend payer

I think Bursa will extend because the aviation industry is improving. Somemore tourism is an important industry to Malaysia with huge economy multiplier.

AAX and Capital A employs a lot of people in Malaysia, u see MOT also friendly to AirAsia one.

AAX will benefit not only from China reopening but from resumption of travel to Istanbul, Australia and many other parts of the world including US!

My target of RM3.36 using 3x PE is intact assuming AAX can maintain their core EPS at least 28 sen registered in 4Q2022.

Another positive news on AirAsia X on its expansion plan. It is now profit driven as compared to market share focused last time. This means higher possibility for higher EPS!

Source: https://www.nst.com.my/business/2023/04/898062/airasia-x-cautiously-executes-growth-plans-ceo-benyamin-ismail

5 takeaways from the news:

1. AirAsia X is executing its growth plans cautiously with calculated moves.

2. The airline will focus on traditional routes and regional destinations before expanding to longer routes like the
United States.

3. AirAsia X will introduce Istanbul as a new destination, targeting middle-income travelers who prefer low-cost carriers.

4. The recent reopening of China presents a huge opportunity for AirAsia X, and the airline has already started flying to Hangzhou, Shanghai, and Beijing with plans to fly to Chengdu in the future.

5. AirAsia X currently has 14 Airbus A330 aircraft, with nine operational and the rest waiting for approval to fly after maintenance.

AirAsia X (AAX) continues to expand its China network with two weekly flights to Beijing restarting last week after almost a three-year pause.

...

Flights will ramp up from twice weekly on Thursday and Saturday to four weekly flights starting 1 June 2023 to meet growing forecast demand, further boosting travel and tourism in the region.

“More expansion in China is on the horizon for AAX as we plan to relaunch more routes and introduce more unique, less travelled destinations in China in the near future,” he concluded.

Source:
https://www.retailnews.asia/airasia-x-expands-china-network/

Keep this AAX as the trend of China reopening is real, I did not see any lockdown news only see more flights going to/from China !

My target of RM3.36 using 3x PE is intact assuming AAX can maintain their core EPS at least 28 sen registered in 4Q2022.

Why is there a need for a capital injection when they already have RM182 million in cash and only RM50 million in immediate liabilities to be paid within a year? Moreover, the company can also generate its own cash flow, so there is no need to issue more shares to obtain additional funds from shareholders.

Travel demand is back not just from China, but Australia too.

AirAsia X resumes first-ever KL route to Gold Coast, Australia after two-year hiatus, news from MalayMail as below.

https://www.malaymail.com/news/malaysia/2023/04/02/airasia-x-resumes-first-ever-kl-route-to-gold-coast-australia-after-two-year-hiatus/62771

My target of RM3.36 using 3x PE is intact assuming AAX can maintain their core EPS at least 28 sen registered in 4Q2022.

Retailers stock up due to confidence that demand is back. Remember they have to pay cash to stock up. So it is a positive sign that demand is really back.

Want to know reasons why APOLLO is worth 67% more than its current price ? Read here...

https://klse.i3investor.com/web/blog/detail/bestStocks/2023-04-04-story-h-274282357-APOLLO_3_Reasons_Why_This_Stock_Will_Surge_up_to_50

APOLLO - Worth RM6.75

One year can easily make EPS 45 sen.
Use its average PE and consumer PE of 15x, this stock is worth RM6.75.

Wah, 65% upside !

Catalyst = Kids back to school, so they buy snack again. It is economy reopening play.

https://www.theedgemarkets.com/node/661232

https://www.theedgemarkets.com/node/661162

UOB Kayhian:

Our top pick for the sector is Hartalega for its above industry operating efficiency and relative upside versus its peers.

• Upgrade to OVERWEIGHT. Recent results have succumbed to margin pressure,
registering unprecedented corporate losses across the sector. However, we expect
earnings to bottom out in 1H23 (even dipping below expectations) but ASPs are due to
finally see a positive and meaningful adjustment across competing regional producers as
well. In addition, with costs expected to moderate in 2H23, we expect losses to narrow.
Meanwhile, valuations are trading close to +1SD to merely recovering 2024 earnings,
suggesting deep value when 2025 earnings are taken into perspective. As a result, we opt
to roll over our valuations to a profitable 2024 for Kossan and Hartalega (have done so for
Top Glove) and peg earnings to five-year mean valuations. We also take the opportunity
to upgrade both to BUY.

TP of RM3.36 remains intact based on 3x PE for 2023.

Sharing article that I read over the weekend.

https://www.freemalaysiatoday.com/category/highlight/2023/03/17/no-more-turbulence-for-tony-fernandes-capital-a-airasia-x/