OSK upbeat on AirAsia's outlook

OSK Research Sdn Bhd is optimistic on AirAsia Bhd's outlook for 2012 on
anticipation that earnings will climb 21 per cent on the back of lower
fuel prices amid resilient growth in low-cost travel.


OSK said as low-cost air travel dominated Asean skies with 32 per
cent penetration, AirAsia was the best proxy to this resilient segment
during times of economic uncertainty.



"AirAsia, which stands to benefit from its two new hubs in Manila
and Tokyo,will also get an earnings boost from its fruitful AirAsia
Expedia joint venture and its ability to monetise its training academy,"
it said in an investment note

today.


It said it expected more yields upside for AirAsia going forward as
the competitive barriers between it and Malaysian Airlines (MAS) came
down after the two agreed to collaborate.







"Under the tie-up, MAS and AirAsia will serve their own target
markets and steer clear of head-on competition via heavy airfare
discounts.


"AirAsia would be able to reap more benefits from the collaboration
following the cessation of Firefly's jet services," it said.


OSK has maintained its "buy" call on AirAsia with a fair value of RM4.57. -- BERNAMA