Anticipating AA Q2 report

AirAsia is going to release Q2 report on coming Tuesday.  Good report or otherwise?  Below are the news from theStar.


AirAsia Q2 results seen flattish on higher jet fuel price

PETALING JAYA: AirAsia Bhd's second quarter results, which is due to be announced next week, is likely to be flattish year-on-year following the rise in jet fuel prices, according to analysts.

“We expect AirAsia's first six months results to meet our forecast but trail the market expectations.

“First half ended June 30 core pre-tax profit of RM350mil to RM360mil will have accounted for 42% to 43% of our full-year pre-tax profit forecast of RM828.1mil but only 36% to 37% of the full-year consensus pre-tax profit of RM965.4mil,” RHB Research said.

RHB estimated that AirAsia's second quarter pre-tax profit would have increased by about RM39.4mil sequentially, mainly due to RM27.4mil positive topline impact coming from an actual 2% rise in number of passengers carried and a 1% sequential growth in average passenger revenue and fuel costs that would have been RM12mil lower on the back of an estimated 3% decline in average jet fuel.

It said as at March 31, AirAsia hedged forward about 40% of its group fuel requirement for second quarter at US$122 per barrel of jet, 12% of its group fuel requirement for July 2012 at US$125 a barrel jet and 27% of its group fuel requirement for second half at US$116 per barrel Brent.

File picture shows AirAsia Berhad Group CEO, Tan Sri Tony Fernandes giving a briefing on the company's strategy at a press conference in Sepang .

 

Analysts said typically for airlines, their second quarter tends to be the slowest but expect AirAsia's high passenger volume to cover the high fuel prices.

In the second quarter, AirAsia's Malaysian operations flew 4.9 million passengers, taking the number of passengers carried in the first half of 2012 to 9.7 million, which was 10.6% more than the first half 2011.

A local bank-backed analyst said AirAsia would still be profitable but its second quarter results was likely to be slightly weaker year-on-year mainly due to high oil prices and the reduction of ancillary income during the quarter.

Ancillary income comprises core ancillary income in the form of baggage fees, in-flight meals and its duty free operations.

He said AirAsia had cut down on the fee for baggage check-in and would see the impact in the second quarter. “Its yield could probably be better as Firefly is no longer in the picture to compete with AirAsia,” he said, adding that the industry was growing organically and the re-rating would be gradual.

The analyst said high oil prices could continue to be high as geopolitical concerns remained.

RHB Research said AirAsia's near-term earnings growth prospects were less exciting as growth from its domestic operation is tapering off, coming from an enlarged base.

“Not helping either, are lingering losses from its new low-cost carrier start-ups in the Philippines and Japan, as well as an online travel agent joint venture with Expedia Inc of USA (Expedia JV), given the long gestation periods for these new ventures,” it said.


Another news from Nanyang.

亚航再申请狮城廉航执照

（新加坡23日讯）尽管亚洲航空（AirAsia，5099，主板贸服股）在过去10年来，一直无法成功申请在新加坡成立一间廉价航空公司，但该公司打算再接再厉。

新加坡亚航新任总执行长罗干维拉谭向当地的《商业时报》证实，亚航正准备申请新加坡航空营运许可证（AOC），以设立一家新加坡航空公司。

他指出，作为这个申请的先驱，亚航已向交通部进行初步介绍，“显示”亚航对新加坡的承诺与贡献。

询及亚航是在何时正式提出上述申请时，罗干维拉谭则拒绝透露详情。