PublicInvest sees AirAsia X 3Q data as “strong”

by **Cals** Mon 11 Nov 2013, 17:11

Business & Markets 2013

Written by Ahmad Naqib Idris Adzman Shah of theedgemalaysia.com

Monday, 11 November 2013 16:11

KUALA LUMPUR (Nov 11): PublicInvest Research has maintained its ‘outperform’ call for AirAsia X Bhd (AAX) after the budget long-haul airline published its third quarter operating statistics.

The research team at PublicInvest Research said they are maintaining their ‘outperform’ call on AAX with an unchanged target price (TP) of RM1.43 following the announcement of AAX’s third quarter preliminary operating statistics.

The researchers believe that the strong 3Q13 operating statistics indicates that AAX will be able to maintain its passenger load, regardless of market concerns on its increased fleet size to 14 planes in 3Q13 from 9 in 3Q12.

“We believe AAX’s strong 3Q13 operating statistics is an indication that it can fill up its new planes despite market concerns on its aggressive fleet expansion,” said PublicInvest Research.

“As such, we view AAX’s growth plans to be on track and it has the ability to compete effectively amid intensified competition.”

The additional five planes have increased seat capacity by 34.2% y-o-y, increasing maximum capacity to a total of 1,028,456 seats.

AAX has managed to keep its passenger load above 80% throughout 3Q13, despite this increase in capacity. The passenger load factor had also improved q-o-q to 82.3% in 3Q13 from 81.8% in 2Q13.

During 3Q13, AAX had launched two new routes: one to Busan, Korea, on 15 July 2013 and another to Maldives via Sri Lanka on 28 September 2013.

With this, AAX had expanded its route network to a total of 17 destinations across 9 countries.

The recent KL-Adelaide route is AAX’s 18th destination with its inaugural flight on 30 October 2013.

AAX’s upcoming hub in Bangkok, which is expected to be operational in 1Q14, will provide another growth engine for the airline.