https://www.bloomberg.com/news/videos/2017-02-23/airasia-x-s-ceo-says-we-re-pretty-much-hedged-for-fuel

Flights to honolulu almost 80% full till December. Not bad for 2 weeks sales period.
Load factors for 1Q2017 currently at 82-83% as compared to 82% in 1Q2016.
2Q2017 ahead of 2Q2016 but no % were given.

Further, I would like to clarify why Calvin's cost of the aircraft at list price is wrong.

Refer to http://airinsight.com/2016/05/16/aircraft-pricing-list-vs-market/

Actual market price contracted for each A330-300 is not 256.4. NO ONE will pay list price! At minimun, it is sold at 109.5m each (more than half of the list price you had quoted). How much AAX (or rather AAC contracted at, we dont know but definitely not 256.4m each)

Further, lower cost would translate to lower depreciation if AAX had purchased (instead of lease) all aircraft, their depreciation + lease expense will be much lower than current level. Thats why AAC is making profit from leasing aircraft to AAX and other AA companies.

In summary, even at this higher level of lease expense (as compare to lower depreciation had they owned all 29 aircraft), AAX is still able to cover all these lease expenses with a net profit in 4 successive quarters.

Calvin,

How do you arrive at 7.5% depreciation?

Please refer to AAX Annual Report 2015 Notes 2(e).
Depreciation for aircraft engine and airframe is 25 yrs.
Residual value for engine and airframe as stated in following page is 10% of cost.

Calculation for Depreciation is therefore
= Cost x (100% - 10% residual) / 25
= Cost x 90% / 25
= Cost x 3.6%

Your 7.5% depreciation (double that of the effective depreciation rate) is actually misinformation.

AAX leases most of its aircraft. That is why you see less depreciation but high operating lease expense.

Which law said you cant own x number of aircraft and lease y number of aircraft (thereby total of x+y aircraft in use)?

Just as in business, I can own 2 copier machines and lease 2 other copier machines.

These 29 aircraft were purchased/leased in prior years.
Using list price given by Calvin, each were USD256.4M

Before Jun 2015 (AAX already has 26 aircraft by then), exchange rate USD-MYR were less than 3.8.

Rough estimation of cost = 29 x 256.4 x 3.8 = 28255
Rough depreciation = 28255 x 90% / 25 years = 1017M **A
*90% is to calculate [cost - residual value] / 25yrs
-->Please read AAX Annual Report for useful life and residual value

Looking at latest quater:
Depreciation = 27985k
OperatingLease = 222240k
Total = 250225k for 3Q
Rough estimation for a year = 250225k x 4 = 1000M **B


So the numbers (**A and **B) are very close. The depreciation/operating lease expense for all 29 aircraft are all accounted for in the Profit/Loss account.

This is just a rough estimation assuming no discount to list price. In reality, you would obviously obtained discount for volume purchase. Hence, had they decided to own them (as compared to leasing them) they would be paying much lower than 1b per year.

The most important and expensive parts of an aircraft are the engines and airframe. They are depreciated over 25-30years. AAX depreciates them over 25 years.

Please read up on all other airlines' annual report on their depreciation policy too for comparison.

Like many ppl have said, they are in depreciation and operating lease expense already.

Those 30 aircraft in operation are accounted under Non-Current Asset (whereby depreciation is charged annually) AND under operating lease (where by operating lease expense is charged). All of the 30 aircraft (be it depreciation or operating lease expense) are accounted for in the financial statements.

By the way, "NON-CANCELLABLE OPERATING LEASES " means when the planes are delivered and put into operation, you will also see "operating lease expense" instead of "Depreciation". AND you wont see it listed under "Property, Plant and Equipment" also.
So please in future, dont raise the same issue again.

I suggest you read the 2015 annual report carefully where it states clearly that the capital commitments are the purchase of those airbus over next 12 years.

The capital commitments are for purchase of Airbus A330 and A350 aircraft over
the next 12 years.

Why do you keep trying to mislead by saying it is for the 29 existing aircraft?

Public Bank Analysis :
.('M).........2016F (Forecast)
Revenue......3688.5 ..A
.
Actual AAX YTD result
Revenue......2836.2 ..B
.
Public Bank Estimation of 2016Q4 Result: ( B - A )
Revenue.......852.3 (Q1:971, Q2:883, Q3:982)

Just looking at revenue alone, how can they forecast revenue for Q4 to be lowest in the year? Did they do their home work properly?

Based on 3Q16 result:, EPS (Rolling 4Qs) is 10.50cents

Assuming 4Q16 = 4Q15,
(to be on the safe side but we know 3Q16 (as compared to 3Q15) has higher sales in advance, and much lower borrowing (hence lower finance cost))
we can assume FY16 EPS may be around10.50cents

At EPS10.5cents,
Using MIDF estimation of Target Price : PER 10.5 x FY16 EPS, Target price should be RM1.10
Using Public Bank estimation of PER 8.5 x FY16 EPS, Target price should be RM 0.89

Assuming 4Q16 is 2cents lower than 4Q15, EPS = 8.5cents (For those kiasu punter)
Using MIDF estimation of Target Price : PER 10.5 x FY16 EPS, Target price should be RM0.89
Using Public Bank estimation of PER 8.5 x FY16 EPS, Target price should be RM 0.72

Waiting for re-rating and BUY call from MIDF and Public Bank soon unless they change their methodology or forecast substantial decrease in profitability in 4Q.

Hi Danny

I think what you had wanted to enter was a stop order / stop limit order whereby ur order to sell will only be triggered when market price hits 2.51.

While this type of order is common in online trading system overseas, it may not available to you here. (U might want to check with your dealer if it is available).

What you had in fact entered is a sell limit (as opposed to stop limit) order which were send to the exchange as Sell at 2.51 or higher. In ur case, it matched at 2.53 (higher than ur limit of 2.51).

Edmund Soo, I think so too.

.............Capacity......Carried....Load Factor...Revenue
Q4-2015......1193959........985739.........83......854M
Q1-2016......1296880.......1055123.........82......971M
Q2-2016......1371526.......1032250.........75......883M
Q3-2016......1560780.......1216943.........78......????
using ave revenue/pax carried, estimated Revenue shd be 1040M.

Preliminary Operating Statistics

For the 3rd Quarter of the Financial Year Ended 2016
3Q2016 3Q2015 Change
Passengers Carried 1,216,943 901,884 35%
Capacity 1,560,780 1,209,416 29%
Load Factor (%) 78% 75% 3ppts
ASK (mil) 7,749 5,770 34%
RPK (mil) 6,034 4,333 39%

Huge jump in added capacity 29% and passengers carried (35%).

Is it good result?