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4Q 2013 Financial Results for MH, AK and D7

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Please flee, are you serious? D7 loss "attributable to Forex - our RM is very weak" ?

Could it not be that D7 business plan is not sustainable?

 

Cheers

Art

 

I believe part of the cost is also due to the recent acquisition and retrofitting some second hand A330.

All the losses are due to combination of factors: Weak RM against the USD, aggressive acquisition of more A330 and retrofitting [24 to be added from 2013 till 2017], order for 25 new A330-300HGW, start-up cost of Thai AirAsia X and Indon AirAsia X, suspension of routes and last but not least oil prices.

I fear for AirAsia Group as well. While adding many new airplanes, AirAsia Malaysia suspended many routes and hit by Malindo, AirAsia Philippines is not growing as aggressively and hit by Tyhoon Yolanda and Cebu Pacific, AirAsia India is remains grounded, Thai AirAsia is affected by political situation, Lion Air is keeping AirAsia Indonesia grounded.......Hope the figure is kind towards AirAsia Group.

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The Thai press reported that Thai Airasia did very well in Q4. But we saw how Forex has affected MH and D7 badly. So while the operating statistics look good, the same may not apply to the financials.

Edited by flee

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@ flee. Thanks for your reply. I do not want to state that i had expected this reply as it is, for that i have too much respect for your inputs on Reds businesses.

But could the Midas touch not have failed this time? Low cost long haul is extremely difficult and maybe impossible to sustain?

Julius, see above, has a few more reasons, but dare i say it, magic is in the eyes of the beholder?

 

Cheers

Art

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But could the Midas touch not have failed this time? Low cost long haul is extremely difficult and maybe impossible to sustain?

Art,

It may be difficult but not impossible - we need to be a bit more patient as D7 builds its operations to a critical mass.

 

The next 2 to 4 years will reveal the answer. If fuel prices remain stable, and the RM does not plunge to RM 4 to the USD, D7 will have a chance. It is now replicating the model AK had. We will see Thai AirAsia X and Indonesia AirAsia X coming on stream soon. So the network will be more comprehensive.

 

On the IT side, I am told that the Airasia web site will offer multi city bookings in the future. So, itinerary building will be easier for pax.

 

Nobody said that the airline business is easy - even SQ and CX are now facing challenges.

 

Many people wonder why people want to invest in the low margin airline business. I guess that is what makes the world go round! ;)

Edited by flee

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@ flee. Thanks for your reply. I do not want to state that i had expected this reply as it is, for that i have too much respect for your inputs on Reds businesses.

But could the Midas touch not have failed this time? Low cost long haul is extremely difficult and maybe impossible to sustain?

Julius, see above, has a few more reasons, but dare i say it, magic is in the eyes of the beholder?

 

Cheers

Art

The long haul, low cost market is indeed difficult to sustain, but not impossible. A lot of trials and error involved. D7 now incorporates free 20kg into the air fare, of course the fare can go cheaper if you select to remove the 20kg free luggage. It took D7 quite some time to find their mojo in the market and establish their name in local market. One thing for sure Malaysia-Australia flights are filled to the brim everytime. Since its incorporation, their operation is much stabilised with 80-85% load factor. Comparatively, FlyScoot had performed worse, both operation and financially wise, but they are still young, give them a few more year maybe?

 

Lets not forget, D7 also added another A330-200 [9M-XAD] to their fleet with current A340-300 doing charter. At times, when all three are not flying, they are losing money. They rely heavily on Saudi Arabian Airlines for the Hajj charter. Perhaps they should set-up a different entity to do ACMI operation. Malaysia and Singaporeans consumers are well-known in undertaking charter flight to less popular, remote or unknown destinations.

 

Rumours also has it that the A330-200 was leased to re-start the London route, and aren't we glad that they didn't. Therefore D7 decided to buy 25 new A330-300HGW do so, only in 2015 onwards if everything goes well.

 

All in all, the operating environment remains challenging, more so as NokScoot and Thai AirAsia X joining the fray.

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AirAsia X posts RM131.1m loss in Q4

 

KUALA LUMPUR: Long-haul carrier AirAsia X Bhd posted a net loss of RM131.3 million in the fourth quarter ended December 2013 to reverse the RM14 million net profit a year ago.

The loss was due to higher operating expenses such as fuel cost and foreign exchange losses, AirAsia X said in a statement yesterday.

AIRASIA X IN EXPANSION MODE - INVESTMENT IN PEOPLE AND AIRCRAFT FLEET

Emphasis Remains in Expanding Network in Existing Key Markets in the Asia Pacific Region

SEPANG, 25 February 2014 - AirAsia X Berhad (“AAX” or “the Company”), the long haul, low fare airline affiliate of the AirAsia Group today reported its financial results for the Fourth Quarter and Financial Year ended 31 December 2013 (“4Q13” and “FY2013”).
The company recorded revenue of RM2,307.5 million for the financial year ended 31 December 2013, a 17.3% Year-On-Year (“Y-o-Y”) growth as compared to RM1,967.4 million the previous year.
This increase was on the back of a 19.0% Y-o-Y growth in Available Seat Kilometres (“ASK”) capacity, mainly from additional flight frequencies to existing routes, and the opening of six new routes; while passenger traffic volume in Revenue-Passenger Kilometres (“RPK”) increased by 16.6% Y-o-Y, with an average passenger load of 82.1%.
The Company also operated a higher number of flights for charters and wet-leases, with total revenues from this segment growing from RM67.8 million in FY2012 to RM107.0 million in FY2013. These flights are not captured in the ASK and RPK tabulations as they are unscheduled flights.
The route network consolidation exercise translated to an improvement in yield, as measured by Revenue per Available Seat Kilometre ("RASK") from RM12.00 sen in FY2012 to RM12.05 sen in FY2013. Ancillary revenue grew by 24.5% Y-o-Y to RM457.5 million in this fiscal year, compared to RM367.4 million in the previous period, supported by total passengers carried of 3.2 million, up 22.5% Y-o-Y as compared 2.6 million previously. During the year, the introduction of new ancillary products and higher take-up rates for Fly-Thru connecting transfer services boosted ancillary revenue per passenger from RM142.36 in FY2012 to RM144.70 in FY2013. Cargo segment contributed RM90.0 million for the financial year ended 31 December 2013, an increase of 13.6% Y-o-Y from RM79.3 million in the previous year.
Earnings Before Interest, Tax, Depreciation, Amortisation and Rental ("EBITDAR") grew from RM308.5 million in FY2012 to RM361.3 million in FY2013. Lower than expected yields, and the appreciation of the US Dollar ("USD") against the Ringgit Malaysia ("RM") towards the second half of FY2013 weakened the Company’s Earnings Before Interest and Tax ("EBIT") from RM49.0 million for FY2012 to RM35.7 million in FY2013.
In 2013, AirAsia X continued to invest and expand in two key assets; people and aircraft fleet. The airline’s employee base increased 54.7% Y-o-Y to 2,011 personnel as compared to 1,300 personnel the previous year.
AirAsia X received a total of seven Airbus A330-300s in 2013, of which, four were on operating lease. This contributed to a higher lease expenditure of RM186.7 million, an increase of 22.5% Y-o-Y compared to RM152.4 million in the previous year. Three other A330-300s delivered were on-balance sheet finance lease, contributing to a higher depreciation cost of RM139.0 million, a 29.8% Y-o-Y increase from RM107.1 million in the previous year.
AirAsia X remains focused on expanding additional capacity in its existing key markets following the 2012 network consolidation exercise, and launched six new destinations in FY2013. Three new routes were in existing key markets in China (Shanghai), Korea (Busan) and Australia (Adelaide), and the additional three in new markets, namely Saudi Arabia (Jeddah), Sri Lanka (Colombo) and Maldives (Male) that are based on bulk travel agent booking commitments. These new routes are expected to reach profitability over a 12-month period. For FY13, new routes represented 40.0% of the incremental ASK, while approximately 60.0% of ASK growth came from frequency additions to core routes. New capacity for frequencies added is also expected to reach maturity in a 9 to 12 month period. The combined capacity increases contributed to a slower total RASK improvement Y-o-Y.
High fuel prices and the strengthening of USD against RM for FY2013, also translated to a higher operating cost as opposed to FY2012. Approximately 65.0% of the Company operating expenses were denominated in USD with fuel expenses making the bulk, at 47.8% of the total expenses. Fuel expenses for FY2013 increased 18.7% to RM1,097.9 million as compared to RM925.3 million for FY2012. In addition, an upfront one-off recognition of non-recurring IPO related expenses and shareholders' benefit scheme of RM26.3 million was also included in operating expenses. The Company recorded a Loss After Tax ("LAT") of RM87.0 million for FY2013 as compared to Profit After Tax ("PAT") of RM33.9 million for FY2012, after a non-cash foreign exchange translation loss of RM176.2 million.
During 4Q13, AirAsia X registered revenue of RM679.6 million, an increase of 26.1% Y-o-Y from RM539.0 million as compared to 4Q12. ASK for 4Q13 surged by 49.0% compared to the same quarter the previous year.
This aggressive capacity expansion was undertaken to strengthen AirAsia’ X leading market position. 44.0% of the ASK growth was from the six new routes, while 56.0% of ASK growth was from frequency additions. There was also a substantial growth of 17.0% ASKs from the preceding quarter, resulting in a large yield dilution in the first quarter of new capacity addition.
RPKs rose by 45.2% Y-o-Y with average passenger load at 80.9%. RASK was weaker by -15.2% Y-o-Y in the quarter ended 31 December 2013 as compared to same quarter in 2012, due to the large capacity increase by the Company and by other airlines adding capacity on the same routes. Cargo segment contributed RM25.8 million for quarter ended 31 December 2013, showing an increase of 61.3% Y-o-Y from RM16.0 million as compared to the same quarter the previous year.
For 4Q13, total operating expenses increased from RM498.7 million or 44.8% to RM722.1 million. Fuel cost increased by 52.5% to RM349.1 million for quarter ended 31 December 2013 from RM228.9 million for the same quarter the previous year.
Azran Osman-Rani, CEO of AirAsia X said, “Despite challenging market conditions, we seized the opportunity to invest substantial capacity to strengthen our market position in our core markets to ensure we remain the world’s largest long-haul LCC operator, with a much larger network scale compared to others. We believe the short-term earnings pressure arising from newly introduced capacity will be well worth the long-term strategic value as yields rise with the maturing of this new capacity. Despite a similarly large capacity increase in 2014, we are already seeing signs of yield improvement from our forward sales”.
"Aggressive cost controls will be deployed in 2014 to ensure we remain the world's lowest unit cost airline operator, and be in a better position to withstand short-term yield pressures."
“AirAsia X will see our new Thai hub open in the first half of 2014, with Thai AirAsia X commencing services into existing key markets in North Asia from Don Mueng International Airport".
"The airline will receive another seven Airbus A330-300 aircraft delivered this year, with one already delivered in January 2014. We will also see stronger network synergies with the AirAsia Group’s short-haul network. We expect even more fly-thru connecting transfer traffic, and a stronger group-wide distribution platform". concluded Azran.

Presentation: http://airasiax.listedcompany.com/misc/qr/presentation_slide_4Q2013.pdf

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From the presentation, it would appear that D7 will not be taking delivery of the A350 until after 2019. All its delivery projections are for the A333. The A343s and A332 will leave the fleet by the end of this year.

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AirAsia X posts RM131.1m loss in Q4

 

KUALA LUMPUR: Long-haul carrier AirAsia X Bhd posted a net loss of RM131.3 million in the fourth quarter ended December 2013 to reverse the RM14 million net profit a year ago.

The loss was due to higher operating expenses such as fuel cost and foreign exchange losses, AirAsia X said in a statement yesterday.

Presentation: http://airasiax.listedcompany.com/misc/qr/presentation_slide_4Q2013.pdf

Just as as per our discussion on the factors.

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web.jpg

 

AirAsia's profit drops 19 percent on higher fuel, maintenance costs

 

Malaysia's AirAsia Bhd (AIRA.KL), Asia's biggest budget airline by passenger traffic, saw its fourth-quarter profit drop 19 percent on higher expenses for fuel and aircraft maintenance.

Net profit for the three months ended Dec 31 fell to 245.4 million ringgit, while net profit for the full year stood at 364.1 million ringgit.
Malaysian Airline System (MASM.KL) (MAS) reported on February 18 a net loss of 343.3 million ringgit on high costs and tough competition.

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web.jpg

 

Flip-flops costly to MAS

 

Azman Ujang

 

WHAT has become of our national airline, MAS? Yet again, it has reported massive losses to the tune of RM1.2 billion for 2013 and the bad news is that there seems to be no end to this turbulence and things can only get worse before it gets better.
This comes on top of a record RM2.52 billion loss in 2011 that was narrowed to RM433 million in 2012.
BFM radio station opened its lines last week for listeners to air their views on the profusely bleeding airline and Malaysians across the board who phoned in were overwhelming in their view that MAS should be allowed to go "belly-up" as the radio show suggested, meaning to file for bankruptcy and start from scratch.
Analysts have also told Business Times that MAS should follow in the footsteps of Japan Airlines and American Airlines and file for bankruptcy, then operate under a new company and with the same name, if the registrar of companies approves.
Both troubled airlines have re-emerged stronger after doing so in 2010 and 2011 respectively, with American Airlines merging with US Airways Group to create the world's largest airline.
The radio listeners unanimously said because of MAS's embarrassing financial performance, there was no room for sentiment even over its status as our national or flag carrier to avoid taxpayers bailing out the airline as happened in the past. Some callers said a reality check for MAS is long overdue.
Over and above fundamental and other legacy problems MAS is saddled with, I would add its flip-flops and political interference as aggravating factors as well.
MAS has had its fair share of opportunities to make genuine turnarounds but each time political considerations threw a spanner in the works.
I'm talking about Datuk Seri Idris Jala's appointment in 2005 as MAS chief executive officer. He quickly came out with two turnaround/transformation plans that resulted in a profit of RM851 million for 2007 from a loss of RM1.3 billion. He also managed to cut some RM2 billion in costs while helming the airline.
Idris was seen as the best thing to happen to MAS in a very long time. The then MAS chairman, Tan Sri Munir Majid said his plans were meticulous, and Idris inspired everyone with his leadership and personal engagement, and communicated its need with every stakeholder tirelessly.
In an ideal situation, any company would love to have someone like Idris to see through his plans but this did not happen. He was instead appointed minister in the Prime Minister's Department in 2009 and the airline began to face even more turbulence.
In 2011, MAS CEO Ahmad Jauhari Yahya unveiled another restructuring plan with the airline as he described it then "very deep in crisis".
And in the same year, MAS and AirAsia signed a share swap deal aimed at deriving synergy between a premium full-service carrier and the best and biggest budget airline.
With AirAsia founder and group CEO Tan Sri Tony Fernandes owning a 20% stake under the deal, everyone was looking forward to him using his magic wand to save MAS and make it a success story as well.
Once again, politics got in the way. The share swap unravelled eight months later without being given time to prove its worth following stiff resistance from the 20,000 employees of MAS's unionised workforce, especially the MAS Employees Union (Maseu).
Maseu president Alias Aziz was reported to have met Prime Minister Datuk Seri Najib Razak three times to tell him that the share swap was bad for MAS. And as the general election was looming then, the deal was called off.
From the business point of view, MAS has the glaring disadvantage of having several unions which can hold the company to ransom no matter how viable its turnaround plans.
And we are now seeing the folly of the termination of this mega deal.
A prominent businessman in the aviation industry told me that MAS is now an incurable diabetic patient whose "legs have to be amputated".
The cause of the airline's problems is that it has gone overboard in every aspect of its operations. MAS with about 100 aircraft has 22,000 employees while AirAsia with 300 planes has only 9,000 staff. And salaries in MAS are also higher than AirAsia's.
"In other words, MAS is not a business entity. I would say MAS has been running like a welfare department," said the businessman, who spoke on condition of anonymity.
"From Day 1, MAS has been declared a national carrier to provide connectivity . Nobody cares about its business model as much as pushing this national carrier role. First stop the bleeding so that MAS does not bleed to death."
He also blamed MAS's woes, besides politics, on its owner, Khazanah Nasional Berhad. "They just don't care. For how many years, even before AsiaAsia, Firefly and Malindo came into the picture, had MAS been having serious problems? I can bet that even if the government tenders out MAS tomorrow (for sale), a few dozen businessmen will bid for it. But this is not going to happen. Why? Ask the government."
He also said that MAS could still be saved as there are capable Malaysians who could run it like a business entity as it should be by starting out as a new company on a clean slate.
Tony Fernandes couldn't hide his disappointment, calling on Putrajaya to review aviation policies as it could not afford to spend taxpayers' money on MAS.
He said despite cutting costs, MAS still incurred such massive losses and it could afford to do so because of government support.
He said: "My point is that if you're running a private company, could you afford to cut 16% of your costs and still lose RM1 billion. It's only because of taxpayers' money that one can afford to do that. And it isn't solving the issue."
I asked Fernandes if under these circumstances, could MAS still turn around?
His initial response was "No" but added that there is a chance if it cuts capacity, focuses on premium traffic and cuts costs. Get out of what he calls the "dumb" routes, like Dubai.
Some radio callers suggested the government allow Fernandes to do "national service" at MAS given his track record.
When asked to respond, he said: "Didn't we try that (before) and the government killed it."
What's next for MAS? Does the government have the political will to stop the bleeding, or can the airline afford another failure?
Azman Ujang is a former editor-in-chief of Bernama. Comments: letters@thesundaily.com

Source: http://www.thesundaily.my/node/242389

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AirAsia net profit dips on unfavourable forex and higher finance cost

 

PETALING JAYA: AirAsia Bhd’s net profit dropped 19.13% to RM245.36mil due to unfavourable foreign exchange (forex) rates and higher finance cost for the fourth quarter to Dec 31, 2013. This was on the back of unchanged revenue of RM1.35bil.

Earnings per share dropped to 8.8 sen from 10.9 sen previously.
The lower net profit was due to the effects of the changes in the closing forex rates in the fourth quarter, which weakened to US$3.21 from US$3.04 in the fourth quarter of 2012. Forex losses for the quarter amounted to RM39.04mil from a previous gain of RM58.42mil.
“The adverse movement in the exchange rates resulted in unrealised forex losses on US dollar denominated borrowings that are translated at the closing rate of each reporting date. This does not represent the financial performance of the business but merely an accounting entry,” said AirAsia in a statement.
Meanwhile, finance cost increased to RM110.33mil from RM97.23mil previously. A look at its operating profit for the fourth quarter showed a 2% decline to RM315.01mil. This was mainly due to the increase in routine aircraft C-check and lower fares.
“AirAsia posted operating margins of 23% on the back of its continuous cost reduction exercise to ensure the airline remain a cost leader in an irrational competitive environment,” said AirAsia. For the full year, net profit dropped by 53.89% to RM364.07mil on the back of a 4.91% increase in revenue to RM5.19bil. Again this was due to forex losses of some RM385.33mil and higher finance costs of RM432.38mil.
AirAsia also announced that it was proposing to seek shareholders’ approval to purchase up to 10% of the issued and paid-up share capital of the company. There are presently 2.78 billion AirAsia shares in the market.
Meanwhile, AirAsia’s passengers grew 14% year-on-year (y-o-y) to 5.91 million which overtook capacity growth of 10%. Load factor was at an all-time record high of 85% y-o-y.
AirAsia chief executive officcer Aireen Omar said in a statement that AirAsia’s cost reduction exercise for the fourth quarter achieved a 10% lower cost per available seat kilometre (CASK) of 12.77 sen from 14.11 sen.
The CASK-ex fuel was reduced by 14% from 6.63 sen to 5.73 sen.
Thai AirAsia posted strong revenue of 6.5 billion baht (RM650mil) in the fourth quarter, up 16% from the same period last year. Operating profit was down by 52% to 444.01 million baht (RM44.63mil) which led to a 40% decrease in profit after tax at 425.44 million baht (RM42.77mil).
Indonesia AirAsia (IAA) posted an increase of 25% in revenue to 1,527.4 billion rupiah (RM430.8mil) for the fourth quarter. IAA posted an operating loss of 369.09 billion rupiah (RM104.13mil) from an operating profit of 160.72 billion rupiah (RM45.35mil). IAA’s fourth quarter loss after tax was 429.32 billion rupiah (RM121.14mil), down 446% y-o-y.

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AirAsia Q4 net profit falls 19%

 

PETALING JAYA (Feb 27, 2014): AirAsia Bhd's net profit for the fourth quarter ended Dec 31, 2013 (Q4) fell 19% to RM245.36 million from RM303.42 million due to unrealised forex losses on US dollar-denominated borrowings and lower revenue.

Revenue was 0.3% lower at RM1.35 billion compared with RM1.36 billion, as average fare fell 18% at RM158 as compared with RM192 achieved in Q412.
Operating profit for the quarter was marginally lower at RM315 million for the quarter compared to RM320 million for the same period in 2012.
For the full year period, its net profit dropped 54% to RM364.07 million from RM789.61 million on higher foreign exchange losses. FY12 also saw a RM118.6 million gain on the disposal of the 4% equity interest in Thai AirAsia.
Revenue rose 5% to RM5.19 billion from RM4.95 billion, supported by an 11% growth in passenger volume while the average fare was 10% lower at RM166 compared with RM184 in FY12. Ancillary income per passenger year-on-year showed an increase of 5% in FY13.
Commenting on the outlook, AirAsia's group CEO Tan Sri Tony Fernandes said it will continue to focus on driving cost down by 7.5%.
"We have already achieved 2.5% in cost reduction in two months and will increase non-fare revenues. Despite seeing signs of competitors being rational by reducing capacity on loss making routes, we cannot take it for granted and the company needs to continue to be creative in driving margins up."
It will now be focusing on capacity management by keeping a young fleet and selling its older aircraft to capitalise on the residual value to strengthen cashflow.
"We have deferred seven aircrafts in 2014 and 12 in 2015 to later years with intention to swap those aircraft with the new fuel efficient A320 neo.
"The outlook for 2014 is strong as we have set targets for ourselves in ensuring the Company remains lean through various cost initiatives. Some of the cost savings will be seen from operational synergies between AirAsia and AirAsia X, headcount reduction as the company looks at aggressively focusing on automation at current LCCT and KLIA2 when it is completed among other significant cost initiatives"
He said the ancillary segment plays a big part in its strategy to drive load factors up as well as revenue, committing to achieve RM50 of ancillary income per person.

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MAS with about 100 aircraft has 22,000 employees while AirAsia with 300 planes has only 9,000 staff.

 

Azman Ujang is a former editor-in-chief of Bernama. Comments: letters@thesundaily.com

Source: http://www.thesundaily.my/node/242389

Wonderful Malaysian journalism at work again - the red fleet has grown quite substantially recently, sole purpose for the author to drive home his message I suppose :)

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Yes, noticed that glaring error - I think Airasia has more than 9,000 staff now too. And it currently operates about 145 aircraft. However, it still does not detract from the message that MAS is over staffed and, unlike Qantas, MAS is not allowed to cut staff as the govt. has no political will to do so.

Edited by flee

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Without government interference and nepotism, and allowing the airline to be run like a proper business, MAS can succeed. Just look at Garuda!

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think ak malaysia have abt 75 plus planes only - the rest are for Thai, Indon air asia.


actually if onelooks at then datul Seri IdrisJalil - he mainly achieve MH turnaround more so by selling of all its buildings and assets incl MAS Building and planes - and not so much by making a profit from MH actual flight operations. And now that MAS assets basically have been all sold and it ows nothing - not even the planes- there's not muchto turn it around; unless its a complete shake-down and start from the bottom and with no political interferences.

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think ak malaysia have abt 75 plus planes only - the rest are for Thai, Indon air asia.

Operationally, that is correct.

 

But from the accounting point of view, it is AK that carries the planes on its balance sheet, make the loan repayments, collect the lease rentals, carry out the maintenance, etc. So it is part of AK's normal business. That is why it is reported in their financials.

actually if onelooks at then datul Seri IdrisJalil - he mainly achieve MH turnaround more so by selling of all its buildings and assets incl MAS Building and planes - and not so much by making a profit from MH actual flight operations. And now that MAS assets basically have been all sold and it ows nothing - not even the planes- there's not muchto turn it around; unless its a complete shake-down and start from the bottom and with no political interferences.

Yes, I have always regarded Idris Jala as an asset stripper, not an airline executive.

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AirAsia Confident of Paying 2013 Dividend After Net Drops

 

Report: http://www.bloomberg.com/news/2014-02-27/airasia-confident-of-paying-2013-dividend-after-net-drops.html

 

Interesting clip:

 

The carrier has ordered more planes to accelerate expansion. AirAsia already has about 140 A320 planes in operation plus 335 on order.

“There’s been so much talk about capacity,” Fernandes said. “We are kind of done with what we’ve wanted to do and we see capacity rolling out. So we are taking a little bit of a backseat now. We’ve deferred a lot of planes -- we are deferring seven planes this year and 12 planes next year. That gives us enough for growth.”

 

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think ak malaysia have abt 75 plus planes only - the rest are for Thai, Indon air asia.

actually if onelooks at then datul Seri IdrisJalil - he mainly achieve MH turnaround more so by selling of all its buildings and assets incl MAS Building and planes - and not so much by making a profit from MH actual flight operations. And now that MAS assets basically have been all sold and it ows nothing - not even the planes- there's not muchto turn it around; unless its a complete shake-down and start from the bottom and with no political interferences.

 

Not to forget the lucrative compensation from Airbus for A380s late delivery....

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AirAsia To Raise US$120 Million By Disposing Ageing Fleet
NEW DELHI, Feb 28 (Bernama) -- AirAsia plans to raise about US$120 million (about RM360 million) this year by selling six of its ageing aircraft of 9 to 10 years old and use the proceeds for future purchases, its group chief executive officer, Tan Sri Tony Fernandes, said.
"We are beginning to start to sell our planes, which will generate significant cash, which will be used for future purchases," The Financial Express reported, quoting him as saying.
AirAsia currently has 138 aircraft (A320s) and plans to expand its fleet size to 170 in the coming years. It has ordered for a further 335 aircraft.
"Our first Neo (fuel efficient Airbus aircraft) comes in 2016 and if you look at our asset disposal, which we will share more information in the next month or so, you will see that on average we could raise up to US$200 million per year (from aircraft sales), which will be used to offset the purchases of the Neo," he had told analysts at a conference in Mumbai.
"The focus for me is improving margins, reducing cost and growing ancillary income which result in more cash. My focus this year is to really grow cash and we are looking at free cash of RM900 million," he said.
The airline will however not sell any planes in 2015 as it has only 17 aircraft deliveries coming it during the year, reported the English daily.
"There will be zero (disposal in 2015) because we only have 17 planes coming in. We will sell six more planes in 2016 when the first of the Airbus Neos are delivered," he said.
Fernandes also said there was a lot of interest coming from different quarters to buy the airline's ageing aircraft, which could result in AirAsia disposing 10 or 12 aircraft instead of six.
The airline, which is looking to start its operations in India, plans to deploy six aircraft for its India operations from its current fleet, the report added.

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9M-AFA is AK's first A320, delivered on 11-11-2005 - this is only 8+ years old. I think that they might be getting rid of Airasia Zest's A320s first - this was mentioned before...

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AirAsia Zest has 1 A319 and 10 A320 with IAE engines, as opposed to fleet-wide CFM engines. Perhaps these are the first few to go. Most of them are above 10 years old.

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