AirAsia remains a 'buy' at OSK Res

OSK Research Sdn Bhd has maintained its "buy" call on AirAsia Bhd at a fair price of RM3.89 as it views the possible tie-up with All Nippon Airways (ANA) of Japan as positive.

In a research note today, OSK said an announcement of the joint venture (JV)to set up a low-cost carrier, likely to be called AirAsia Japan, was expected sometime next week.

"The JV's structure is uncertain but it may see both companies taking up equity stakes, with AirAsia being the airline’s operator," it said.

OSK said although the management has yet to comment on the proposed JV, the likelihood of it materialising could be high since Japan’s aviation market was increasingly being liberalised.

It said there was also a high chance of AirAsia being roped in into another JV, Peach Aviation, with a stake ownership.

"Peach Aviation, the country's first low-cost carrier, is expected to start operation in March next year. It is a partnership between ANA, Hong Kong's First Eastern Investment Group and Innovative Network Corp of Japan," it said.

Meanwhile, MIDF Research said the relocation of AirAsia’s operations in Kota Kinabalu International Airport, from current Terminal 2 to Terminal 1, was expected to increase its operational costs.

In a note today, MIDF said it would, however, not lead to a reduction in the number of flights and one million passengers annually as highlighted in the media.

"The move is win-win to all parties as it will not only help AirAsia improve efficiency in operations, but will also result in better customer satisfaction and boost passenger traffic due to better connectivity," it said.

MIDF has reiterated a 'neutral' call on the stock with a target price of RM3.43.

On Bursa Malaysia, AirAsia fell five sen to RM3.50 at 11.50am. -- Bernama