AIRASIA Bhd (5099), Southeast Asia’s biggest discount carrier, posted a record decline in Kuala Lumpur trading after reporting its first loss since going public in 2004.
The carrier slid 14 sen, or 12 per cent, to close at 98 sen, the second-worst performance on the benchmark Composite Index.
AirAsia lost money on trades held by the bankrupt Lehman Brothers Holdings Inc and on wrong-way bets on oil prices. Chief executive officer Datuk Seri Tony Fernandes also faces slowing travel demand at the airline’s Thailand hub, which has been paralysed by a week-long anti-government protest.
“It’s a sell,” Christopher Eng, an analyst at OSK Research Sdn Bhd, said in a report today. “We are concerned about its longer-term prospects as its associates continue to bleed and AirAsia reaches saturation point.”
He downgraded the stock to “sell” from “neutral” and lowered his price target to 67 sen from RM1.10.
Even after stripping out the one-time charges, AirAsia still recorded operating losses “significantly below” OSK’s estimates and consensus expectation, Eng said.
Sepang, Selangor state-based AirAsia posted a loss of RM465.5 million in the third quarter as it had a charge of RM215 million to cover costs from unwinding hedging contracts and the likely non-recovery of collateral for trades held by Lehman.
Thai Losses
Thai AirAsia Co, the airline’s Thai unit, had a loss of 250 million baht (US$7 million) as travellers shunned the country. AirAsia last week canceled all flights to the Thai capital after anti-government protesters stormed the main terminal of the city’s airport, closing it down.
Thai Airways International Pcl and Thai AirAsia were the biggest operators at Bangkok’s Suvarnabhumi last year, accounting for 28 per cent and 12 per cent of commercial aircraft movements respectively, Airports of Thailand said on its Website. - Bloomberg
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