Capital A Bhd’s (Capital A) 3QFY24 operating statistics show that the international segment continued to experienced robust demand, with passenger growth outpacing capacity growth. Passenger volume for the consolidated aircraft operating certificate (AOC) operations (Malaysia, Indonesia, Philippines, Thailand and Cambodia) increased by 1.3% QoQ to 15.8m. Passenger load factor (PLF) for AOC remained at a remarkable level of 89%, marginally lower by 1.0 percentage point (ppt) QoQ, due to a 2.6% QoQ increase in capacity. During the quarter, the Group added 3 new A321neo aircraft and reactivated 3 additional aircraft, bringing its total activated fleet to 202 out of 216. With this, we believe the Group is well position to capitalise on the growing travel demand across the region. We maintain our earnings estimates and Outperform call on Capital A, with target price of RM1.57 unchanged. Capital A is schedule to release its 3QFY24 results and passenger yield data on 28th Nov 2024.

• Capital A’s consolidated AOC operations continue to post significant improvements, with passengers carried in 3QFY24 increasing to 15.8m (+7.8% YoY, +1.3% QoQ), along with available seat per km (ASK) rising to 21.5bn (+7.6% YoY, +4.6% QoQ). The improvement was mainly driven by growth in international travel. Total flights flown were close to 97,000 (+7.9% YoY, +2.0% QoQ), with 170 operating aircraft during the quarter. The Group’s newest airline, AirAsia Cambodia demonstrated remarkable performance with passenger volume surging 62% QoQ, contributing to a 15ppts improvement in load factor. Excluding AirAsia Cambodia, overall passenger numbers are nearing pre-pandemic levels, with YTD recovery reaching 85% of pre-Covid figures, surpassing capacity recovery of 81%.

• ADE. Despite closing down one existing hanger in KLIA, ADE’s hanger capacity still expanded from 7 lines to 12 during the quarter, following the launch of the first 6 lines of its newly constructed 14- line MRO hangar in August. In 3QFY24, ADE completed 13 base maintenance checks, a slight decline compared to the prior year due to the near completion of AirAsia aircraft reactivation effort and the need for more extensive base checks, which include comprehensive structural inspections. Meanwhile, the line maintenance checks completed this quarter has surpassed 3,000, a 17% YoY increase driven by operational the launch of ADE in Philippines and Indonesia. In addition to AirAsia as the anchor customer, ADE recorded a 20% QoQ increase in number of line checks performed on third-party airlines during the quarter, contributed to the overall growth in line maintenance check.

Source: PublicInvest Research - 25 Oct 2024