shrobin, nice sharing, USD100 oil price has confirmed gone.......although this is unevitable and it's progressive, I still wonder how soon could we achieve the ultimate end of this video showing? ......there would be stumbling stones ahead setup by the current stakeholders and politicians including oil industry + traditional car industry. Big picture should be stated in long term like this video showing......not something that stressed by somebody else which could be flip and flop then flip flop again within days and weeks

Unless there is technology break through for shale oil, i think USD 50 to 60 is the new balance for current crude oil price provided that there is no price war. Price war effect is staging, it would eventually back to normal when the high cost players are kicked out from the market.

Read from a week ago article , the highest operation cost is UK player which is USD50 something.
US shale oil is USD 30 something......Including transportation ,services, taxes and ext....I believe shale oil players break even cost is around 40 to 50.

Valuegrowth & batu88, Ya, I hv learned a lot from both of you and other sifu too......thanks and pls keep contributing

batu88, I think the hedged contract/options would keep booked under MAA's USD borrowing hedge before expiry. MAA would not possible to become 0 liability as new aircrafts would coming in, there is no indication of AA planning on 100% aircraft operating lease, some of the new deliverables would still parked under MAA. So in the condition of USD/RM rate keep staying above the hedging rate, those isolated contract/option would help MAA to dilute further for MAA's USD loan no matter it's growing or shrinking.

Winners show their success, only losers will simply repeating in saying they HV succeed but not showing any proofs .

Batu88 & SharkTank, I don't regard myself as a sifu as I believe my analytic skills are yet to reach that level. The amount that we've gained or loss doesn't conclude our investment life until we are ready for retired from the market as nobody will always right or wrong.

BuyWithConviction & Investo, many of us visit this forum to gather updated stock info, news sharing or even make some absorption of many sifus analysis, but I don't see you contribute any of these beside of spamming the thread and quarreling with others.
You wanna boost up your winning strategy and your success stories, the simplest way is show out your results to convince ppl........
If someones are so proud of their balanced view or win-win plan and keep emphasizing on their success stories, it was fair enough ppl come to challenge their results.
So far until now you still portrait yourself that you have nothing more than a blank paper.....Sigh.........

Hi valuegrowth, if follow the example below :
http://imgur.com/a/SIgDi

Either to go for options or forwarded contract, the hedging is totally isolated from the aircraft loan itself as they are different transactions.

And AAC accounts are all denominated in USD. When AA transfer a plane from its associate to AAC, there is no point to transfer together with the plane loan hedging as the hedging would be settled in RM, however AAC cash flow are mostly in USD. Imagine how silly a deal would be to convert the USD to RM by AAC to settle the hedging for USD borrowing but in fact you have rich of RM in MAA accounts?
There would be extra forex services charges incurred to do that.

https://www.youtube.com/watch?v=LrRymIPFobY&feature=youtu.be&t=2890
This AA senior management claimed that AAC has USD600+M immuned from forex fluctuation.
If you cross check to AAC account from 4Q16 report, its borrowing is USD632.2M which is totally matched to his statement.
Hence, we can conclude that all of the AAC aircrafts borrowing are unhedged loan.

I believe this would apply the same after AAC sales, the hedged contract or options would be retained in AA as it does not make sense for the buyer to purchase together with RM based hedge contract for this USD orientated AAC.

BuyWithConviction, Learn to read. From your twisted tone it is clearly you are avoid from my challenge and too shy to disclose your "bright" trading history so that you could earn more followers. I'm giving u a chance to prove yourself rather than talking nonsense here you see?
Very disappointing....

BuyWithConviction & Investo, If you are so forgetful, I don't mind to remind you that I've already posted my realized gain & loss this morning. Too lazy to scroll back to history? Let me do you a favor :
http://imgur.com/a/F60Sb

Where is your track records then? Don't simply blow up the story of 3,4,5,6 times gaining from AA but no solid proof.

batu88, agree with majority of your thought but I don't think "AAC version 2" would become a story.

1.) AA do it once, buyers would take her excuse of focus on core business so spinning off non core is reasonable. If AA do it again and again, the confusion of AA as an airline business or leasing unit selling business would arise.
2.) The value of repeating selling can never match to one off selling as buyers gain bargain power by knowing you're eager in selling if selling leasing unit is one of your business.
3.) Market is recycling, aircraft leasing would not be all the while overwhelming as of today. When everybody is rushing into the sector, market saturation is just matter of time.
4.) As an investor, I would start worrying too if Tony never keep his promise of stop diversifing AA and focus on airline business. Trustworthy of the management is heavy weights in my investment decision, I believe this apply the same to many value investors.

My long waiting for valuegrowth's article too........

Show ppl your portfolio to see how great you can get with your balanced view , don't just day n night keep spamming the forum with repeating meaningless & empty stuff.........you would have bunch of followers if result is there....unless you don't

It make sense to hedge at current level, but to hedge for more than 1yrs is arguable......how would you know the current relative low price would not become relative high in future? Cathay pacific airway has already show us what will happens when an airline hedging forward for N yrs during the oil price stay at peak. It would not be fun when all of your peer making $$, but you are the only airline to apply fuel surcharges to then passengers

http://onemileatatime.boardingarea.com/2016/09/07/cathay-pacific-fuel-surcharge/

Supersaiyan3, Tony already said AA would not consider multiple yrs rolling fuel hedge. I'm agree with him......main purpose of fuel hedging is to safe guard the earning from forward booking, not for gambling.....

Mr. BuyWithConviction, this is how much I've made since early of 2016.
http://imgur.com/a/F60Sb

I've reinvested majority of them into AA with average share price of nearly RM2.67.
Yeah..... I'm merely break even with current share price.
Think I should position myself as one of the poor sifus that you're referring to.
Could you show us your profit to embarrass me further from these little poor gain?
I'm begging you..... pls....

BuyWithConviction Investo, so late today? Anyway, yes big picture proven again right about short term market uncertainties but AA now moving because of small picture I suspect.
A bit late to chase I think. You made 3 rounds in AA already, leave some profit for the poor sifus who not broken even yet, Hehe

Yes, I like our new method. See today the gang had to make so many attacks but we counter attacked N explain to readers so easily using 1 - 2 comments. Great job! Hehe
09/03/2017 20:41

Don't think AA would setup another leasing unit. Sales of AAC is indirectly another form of sales and leaseback. This could possibly the best practice for AA if USD/RM keep rating high in the coming years. The benefit are :
1.) Book the sales & lease back premium from the airbus discount while USD staying at historical high.
2.) Mitigate the forex loss risk by reducing USD loans.

Pls do some study b4 u claim AA NVR pay dividend. The past record has already show that AA would only announce dividend after more than 1month from 4qtr result. AA has dividend paying policy of 20% from EPS

Fleet size to be doubled in 5yrs......if the cost saving and high load factor plan could be achived.....it would be a big WOW.

batu88 : not yet...my agent told me it would take 7 working days to direct credit into my account. I used extra saving to buy.

https://twitter.com/CAPA_Aviation/status/837133494182535170
https://twitter.com/tonyfernandes/status/837156201016225792
https://twitter.com/tonyfernandes/status/837155993981186048

Soon it would becoming growing stock where long term investor would
enjoy the fruitful returns. Had already converted all my expired C34 investment + 24.4% earning into Airasia stock.
Trust into Airasia.

Thanks for the sharing....here I drop some notes for the video briefing:

- For 4Q16, sales of aircraft has contributed 22M to the section "Other Incomes", the increased balance YOY (from 65.5M to 143.5M) is due to other growthing engine from associates sort like Brand Licensing fees from IAA and FAA which they have start paying, the normalized other income in future would be 100M.

-AACE IPO would generate 125M - 180M USD

-AAC 4~5weeks after 27th March to decide and announce. EGM for approval would be on May or June

-Air craft cost is substancially lower than many of AA competitor, that's one of the reason AA has lowest cost in the world.

-1st Qrt forecast load factor: MAA 89% TAA 87% IAA 82% PAA 92% AAI 89%

-Yield would go down because AA is expecting to promote air fares to push for load factor. Main concern is to focus on RASK instead of yield. Tony promised RASK would go up for 1Q17, but does not willing to anticipate for future quarters.

-IPO of FAA and IAA is scheduled to second quarter.

-Additional Aircraft this yr: MAA 8, TAA 6, IAA 2, AAI 6, PAA 5, JAA 3

-PAA if not including one off lost of disponsing 6 IEE old aircraft, it is actually making profit last yr. There would be another 2 aircraft to be disposed this year. PAA have record
profitable month this January. Bullish on PAA.

-Forex gain of 2016 is contributed by :
1.) Carry out corporate exercise of converting intercompany loans to perpectual notes with much higher rate.
2.) Convert back some years back Chinese Yuan Fixed deposit into RM which has significate rate gain.
Net off the corporate exercise, under normal operation, there could be RM50M~RM60M lost in forex for entire 2016.

-Stable state profit margin for AAC is about 23%-24%

-ASK growth with new plane would be about approximately below 10%

-Year 2016, out of 172 planes, 46 planes are on operating leases

-Out of the 30 new planes, some of them would be come from AAC.

-operating expenditure 50% hedged up to May 2017 is at rate of 4.3, would consider to hedge more.

-2018 fuel hedges just 1% started from today. (Everyone laugh, don't know whether this is joking)

-Not considering multiple years rolling fuel hedges.

Batu88, be ambitious, I wouldn't be surprised if AA hit above rm3 by 28th. The average price should at least 2.9

WinningPost，just checked the announcement, u r damned correct!!!!!! I'm more exciting in getting know to exclude 21th share price !!!!!! Ya....Let's sail the boat toward north !!!!

Is it?!!!! Good news, will check later

28th should not be count as it has expired. Start date is 21th instead

hopefully tomorrow also have large volume to maximize our gain at C34!!!! Yahhhhooooo!!!!!

Yes!!!!!.....For those C34 existing holders, just in case you would be disappointed with final gaining when you receive your settlement, I want to remind you that the closing price would not be follow 27th last minute closing but averaging of last 5 trading days started at 21th Feb.
For your info :
21th Feb is 2.69XXX with relatively low amount
22th Feb is 2.79XXX with relatively large amount
23th Feb is 2.78XXX
Tomorrow is expected with huge jump, same apply for next Monday.
Enjoy your income generated from C34!!!!!

C34 is follow Volume-weighted_average_price of last 5 days where the formula could be found at the URL below :
https://en.wikipedia.org/wiki/Volume-weighted_average_price

batu88: I'm not sure, yet to experience b4.

CW34 will be expired on 28th Feb. 23rd Feb is the last trading day. Halt trading in prior of 3 trading days before the expiry is to allow warrant issuer to have enough time to finalize the warrant holder list and do some processing work.

Yup....thx valuegrowth, just get to know from the latest AAX announcement.

SFO has officially named AirAsia in the rolls Royce deals in its publication on website. Now I don't know who to trust with

I'm not referring to the $3.2M jet discount. If there is no transaction between rolls Royce and AA, how could the benefit of selling services and products as a return become valid, some more SFO was claimed to fine rolls Royce double from the gross profit of selling aircraft engines to AA.

AirAsia has had no dealing with rolls Royce at all material times? Any sifu can validate if this statement is true? If it's true, then the source which reporting the bribery is a serious defamation to Tony .

In facts, a year earlier, TF already announced its plan of disposing massive number of existing aircraft. This would :
1.) Free up cash for the new purchasing of A320neo and A321neo.
2.) Lock in the profit for the premium from it's initial discounted price from AirBus.

http://www.todayonline.com/business/airasia-sell-and-lease-back-120-planes-revitalise-operations

check out this, sales and lease back model has been using by range of LCCs, it's not AirAsia's privilege.
https://www.flightglobal.com/news/articles/analysis-lccs-profit-from-sale-and-leaseback-strate-386073/

Instead of supporting accuses from GMT report,
this bloomberg article has actually stress out author's opinion of TF's real intention to divesting AAC -- to remove the "accounting gimmicks" shadow GMT's report cast.

He also opine that AA should never bother GMT report and continue to operate its Aircraft leasing unit as it would provide sources for AA to sell and lease back its Aircrafts to credit in the discount advantage of this AirBus' biggest customer which any other aircraft lessors would never have chance to enjoy.

I would like to factor in some less considerable of this article :
1.) Author's comment : AA would lost its sell and lease back model along with AAC sales. Ancillary and baggage revenues would then become AA's main source of income in future.

My opinion : Obviously this author doesn't know well with the history of AAC. AAC was incorporated at Sep-2014.
AA's sales and lease back model has been running far before AAC has been incorporated if follow his posted chart (back dated until 2010).
https://www.bloomberg.com/toaster/v1/charts/9ba73a7083d44aaa94156875270df106.html
There is no reason AA cannot persists its sales and lease back model since this model has already exists before AAC.
AA is not going to switching its model to ancillary income. Ancillary income would be the new engine for driving growth at the mean time sales and lease back model would still be remain.

2.) Author's comment : AA would lost it's bargain power to Airbus after losing its leasing arm as it would no longer the customer who holding the second largest outstanding order.
https://www.bloomberg.com/toaster/v1/charts/3f73a57820cb49c5b4f60e60040607fb.html

My opinion : I'm not sure how many aircraft from these outstanding orders have been planned in deploying to AAC. As far as my concern, only 30 A321neo were confirmed, probably other expects who have better antenna can help to explain.

:):)

I really hope AA would utilize big portion of $$ generated from its AAC sales to repay its USD debt , probably declare 20~30cents of interim dividend to drive some positive emotions in share market.
This is conservative but would assure AA benefit in the USD ascending trends which bring high cost to interest payment.
However, from TF's recent interview, he insists to repay debt with AA's strong cash flow.
AA is more keen to declare huge dividend or utilize it for expansion. I would prefer the latter but many analyst speculate for huge dividend due to TF and kamarul are hungry for cash on private placement. In that case, my least hope is for 50% dividend, 50% expansion.

For long term investors who focus on its USD debt on weak RM :
2Q16 USD debt summary :
RM9,260,059,000 with approximately 58% from total hedged at RM3.2368. At 30/6/16, RM/USD rate was 4.0225 .

3Q16 USD debt summary :
RM8,835,937,000 with approximately 62% from total hedged at RM3.2368.At 30/9/16. RM/USD rate was 4.1455

When RM weaken with almost 3%, AA is managed to reduce its debt with more portion of USD being hedged at low price. Can you see how strong this company can generate cash flow?

Furthermore, its current net gearing ratio is 1.47 almost cut into half y-o-y (2.98 at 3Q15).

In such scenario, I've no worry even though with RM depreciate 20% more in next few quarters.
Beside of unrealized forex loss, I can't see any negative impact on AA.

Do you know what is core EPS compared to the real EPS? Do you know that AA has actually in positive core EPS when it falled in EPS -14.60 at 3Q15 when RM fallen from 3.XX to 4.XX ? This translate to AA's strong cashflow which they can earn even more to debt repayment on RM depreciation like hell..........
Do you understand how to read financial statement? I'm so doubt now.

The Rm79.869 BILLION is contracted from the 300 A320neo where the first 200 was ordered at 2011, additional 100 ordered during year end of 2012. Which amounted to USD27Bil before discount.

This has not even accounted to the 100 A321neo new order just happened recently. Hence you can see the amount would be ballooned in next few quarters.
Can you do a little bit study while spreading the fear to others?
I don't mind for any negative comments to AA, but pls do your own study to supports your points rather than blindly throw out a figures to scare people.

The cost of airplane is not fixed and would become super cheap when you have significant order to the aircraft manufacturer becoz they would give huge discount on big order. This make AAC valuable when AA announced that it would deploy 30 A321neo to AAC from its 100 order booking to AirBus.

20yrs ago, there is no budget airline in malaysia, where its business model is totally different to the full service airline. The primary principal of budget airline is cost saving then give back saved cost to the customers which enable grass roots afford to air ticket.

http://data.worldbank.org/indicator/IS.AIR.PSGR?locations=MY
20yrs ago, international air traffic of Msia is merely 15Mil, by 2015 the figure has already hike to 50Mil, more than triple in count, and this is solely the figure of international flight, not even considered with the massive growth of domestic flight. Would the cost be same when you serve 15Mil customers if compared to 50Mil customers?

To those who focus on AA's USD debt :
At 3Q15, AA's USD borrowing was amounted to USD2.841bil
At 2Q16, AA's USD borrowing has already narrowed down to USD2.302bil
19% reduction in just three quarters !!!!
We can't deny that weak RM has significant impact on AA financial with it's huge USD borrowing.
However, we could relief with AA's smart management which had foreseen weak RM trend would stand long.
They have been trying so hard in:
1.) Maximize the effort in USD Debt repayment with a significant 19% reduction.
2.) Initiated a private placement of RM1Bil to their directors for further debt reduction
3.) Disposing its aircraft leasing arm (AAC) to further dump off a big portion of its USD debt.

When a company can generate a strong cashflow to repay her debt in a non-favor (to her) currency environment, what are your afraid of?

MAHB stated it is open to discussing any airline's requirements to switch terminals if it benefit the airlines and the requirements can be accommodated based on availability of capacity at the terminal

Based on availability of capacity.......huh huh......so fishy ya Mr. MAHB

The equal playing field that mavcom claimed of would only formed when aa moved to klia

Mavcom can now decide whether lower the psc at klia2 or just let it feed mosquito.

Haha.....klia2 then occupied to grow grass then?

To those who give negative view on 2nd qtr result, pls clear in mind that this is the weakest qtr of aviation industry. If 2nd qtr also can post 12.3cents eps, if can’t imagine how big AA could earn in 3rd qtr and 4th qtr.

what the heck r u talking abt? EPS 14.3 in one qrt would bring down the price to RM2.5? what kind of FA is it? You expect AA trade below PE 5 in this low crude oil + plenty room of growth environment?