Yes, should be 0 but they continue to recognise, not consistent enough, but it would make the figure more conservative as it reduce MAA's profit.
They may have know something when preparing FY2015 result but choose to recognise the loss. If incoming FY2016 result didn't reverse/reduce the 4Q15 loss, then there is something wrong, MAA may quietly invest more in IAA last year but didn't disclose it.

But also take note a small trick : based from available report, FY2015 is loss making, however in 1Q16 MAA recognise about RM 119 million profit from FY2015, which mean the losses in FY2015 is actually much lesser than what we know now. The answer will disclose in 4Q2016, when they indicate in comparison table.

rMoi, yes there are losses in 4Q15 & 2Q16, and profit in 1Q16 & 3Q16. All of them have been recognised.

learn a lot from you too =)

Cruger, I checked that too.It wouldn't, as per accouting standard MFRS128.
Why after last year subscription, MAA straight away book a RM 625 million loss? That's because IAA has accumulated losses more than what MAA has invested before last year subscription. MFRS128 allow for mother company not to recognise any other losses more than money they have previously invested. In other word, when mother company invest more, mother company must immediately recognise all those previous unrecognised losses.

The accumulated unrecognised loss up to 2Q15 is RM474.2 million, while in 3Q15 the 49% of current loss is RM 155.7 million. When MAA invest (via PCS) IDR 2,058 billion in IAA in 3Q15, they must now recognise those unrecognised losses, up to IDR 2,058 billion.

I will paste the MFRS128 in the article above with this explanation.

supersaiyan, no cash need to be spend, just some accounting exercise.
If there is any, probably is all owing by IAA to AAC have to transfer to MAA, as AAC going to be spinned-off soon.

http://klse.i3investor.com/blogs/valuegrowth/111899.jsp

My research for this round of Perpetual Capital Securities subscription and its effect.

http://www.bursamalaysia.com/market/listed-companies/company-announcements/5290857
http://www.bursamalaysia.com/market/listed-companies/company-announcements/5290861

Seem like AirAsia is briefing analysts, today is full of news.

The Edge Flash: AirAsia buys RM1b worth of perpetual capital securities in Indonesian unit

Amateur Player, not so easy for Q4, as 4Q15 there is 400 mil profit recognition of previous leasing impairment, and forex loss at then just 100 mil. However, with AA crazy trend of repay loan earlier this year, at best case AA may have no or very little forex loss. A bit unknown.
Regardless, even if jet fuel price shoot up to USD 80, it wouldn't poss any issue to AA next year as 58% hedged at USD60 mean the effective jet fuel price will still be less than 68 USD.
A surprising next 12 months is coming.

HSR will take 90 minute, but straight to KL city centre/Jurong East.
AA will take 60 minutes, but with ERL it wouldn't be too much different.
The ticket fare for HSR for sure will be quite high.
For business traveller, it wouldn't be concerned, but for traveller they will prefer AA as you still able to get discount for air tickets. HSR wouldn't have this discount.

High speed rail will be awarded next year and complete by 2026. The express train may post some threat to KUL-SIN, but that's 10 years later. By then KUL-SIN may not be as significant as it's now.

AAC is just a massive sell and lease back, which can sell at higher price than just sell an aircraft a time for 30 times.

Calvin, don't read news title without looking into contents...
SQ going into low cost, by set up Scoot 5 years ago, not mother company themselves la.
SQ will be stupid to give up their premium product for low cost.

Very agree with TF on replacement of aircrafts. PAA fleets are very old and almost 1/2 of them need to spend probably more than USD 2 millions each to do D-check (and more than 4 weeks out of operation) so that it can continue to operate. In term of fuel efficiency, on average other affiliates can fly about 32~34 km/barrel, but PAA can merely hit 26km/barrel. If change to NEO, a 15% fuel saving compare to new CEO would mean around 38km/barrel.
Totally waste of money just to keep those old aircrafts.

@lulu, can't agree more, and seem like that particular stupid forumer think his spams are comments.

BuyWithConviction, the infamous spammer who waste his life here just for the pity bit of fun, he probably can't afford to buy any share, so bring his big picture up and down so that he can feel the share movement.

Bison, it's a new issuance of share, TF & KM (via Tune Live) will pay AirAsia RM 1,006 million for 559 millions of new share.

He not only shameless, but also willing to waste his life spamming.

Wow, finally BWC know he is spamming

wow, BWC's big picture change liao

hey guys, for this 1,006m, will it consider as other income or it will only show up at CFS & BS?

Seriously, TF & KM should pay AA interest rate for make us wait for half year.

bloody hell, finally done!

Cruger, don't bully BWC la, his big picture is so big and currency keep changing hourly and he have no time to do analysis and can only keep his his eye on big picture. As you know, big picture is so big for him and he unable to digest it.

Bcos buyer can get:
1. 59 aircrafts cheaper than they can get from Airbus + no need to wait for 3 years
2. They instantly get leasing contracts of 59 aircrafts

Pity BWC

rMoi, no, it's not necessarily 3rd party lessor get these aircrafts in question from AA. Despite big order AA had make, it would come some time that deliveries of new aircraft can't meet AA's expansion need n AA have to lease from lessor. But it's true that quite a lot of aircraft AA leased from 3rd parties r under AA's SLB.

Hi VLR, my appologise, please ignore #1 above which is a mistake.
AA is taking aircraft delivery as borrowing and they are repaying it with cash flow. In other word, net profit we get from IR is inclusive of those repayment.

VLR, to add,
1. your 42 years is base on AA has a fixed annual avenue of 2000m and will never grow. In actual fact, AA's revenue is growing at CAGR rate of 10%, at this rate it will take 18 years.
2. when AA take delivery of an aircraft, they will recognise the asset and borrowing in Balance Sheet, but in Income Statement, they will recognise this cost as depreciation, probably over 20 years.
3. For AA, Tony Fernandes prefer to sell the aircraft when it reach about 12 year old, before maintenance cost start to raise dramatically. At this time, there will be a one-time gain. (note that AA get a big discount for their aircraft purchase, which mean even if they sell an aircraft even at delivery, they will actually make a few million USD gain.)
Hope above help for your study.

YLR, capital commitment is not a loss by default.
For example, I have a commitment with Petronas to buy 1m barrel of oil at 50usd per barrel, that's 50m USD for a guy who earn maybe 50k per year. I would need 4000 years of income to pay it.
However, let say at 2020 oil price is USD1000, then actually I make profit of 50mil by selling it.
So it's not a correct way to see capital commitment as loss.
In AA's case, do you think Airbus will agree for the contract if they think >50% chance AA can't pay for it?
10 years ago, AA is just a small LCC have less than 20 aircrafts and they make a 150 aircrafts order. They make it today.
400 aircrafts order for a 173 aircrafts LCC today is just a merely 2 times their current size, and AA have a 3bil population market to grow.

Icon, thanks for the info.
Very useful insight.
Interesting to noticed that ex-AAC， AA's operating lease expense is only RM19mil. Meaning that roughly about 4~5 aircrafts are leased from other lessor.

Feisch, agree on #2.
I really don't think for future new aircraft AA will sell right on delivery to AAC and lease to associate. I look more like a "bundle sale & lease back of 25 owned aircrafts" + "bundle transfer of 34 operating lease from leasors" at current stage. Unless specified in sale contract, disposal of AAC in no way represent AA will transfer their order to AAC & will lease from AAC in future.

kungfee, it's 1000 x 4.46 / 3342 x 0.3

Southwest share price when it started expansion at 1990s is only around $4,but now it skyrocket to 10 bagger (10 times) today.
However, in short term it may not earn u a single cents.
From $4 to $40, its share price only need to double for 3 times.

skng74, put under AAC may make it look good in BS, but I would say it actually reduce extra income from aircraft leasing in long term. AirAsia still in expansion stage now. I believe in long term, after years of stable income and completion of explosive expansion, aircraft borrowing ratio would be reduce to such a scale that it would dwarfed by retained assets, just like what happened for Southwest, easyJet and Ryanair.

BWC, continue to waste your life spam here, nobody lose anything other than yourself

Sorry, Non-MAA fleet size is 96
39 aircrafts didn't put under AAC

I think AAC will only take at the most 2/3 of it.

Non-MAA fleet size: 88 aircrafts
Aircrafts under AAC: 57 aircrafts
There are 31 aircrafts to affiliate didn't put under AAC account.

However, do note that AA may take deliveries as many as 22 A320neo on 2017 (unlikely but this is what Anaz Tajuddin told Aviation Week), this could easily add another USD1b debt into balance sheet

skng74, depend on how they sell AAC off, but mostly yes.
out of remaining RM8.2b, about RM7.8b is aircraft borrowing.

Hey guys, I am thinking whether shall we create a facebook group to share info among each other, instead of using this heavily spammed and full with hatres forum?

Cruger, stop trying to communicate with investor BWC, no point talk to someone who don't understand human language

Warning, Calvin reiterates his non-sense call

Guys, do u notice IAA result?
AAB's share of profit is RM72.7m, almost double of TAA's contribution.

Post removed.Why?

Dare u?

Let bet that, BWC

Write a comment..if AA raise to RM3, can u shut up forever?
If AA drop to RM2.55, I shut up then.