‘AirAsia, AirAsia X shares up on potential route recalibration.’
AirAsia and AirAsia X shares rose in active trading sessions yesterday
INVESTORS may have been excited with news of a potential route recalibration involving AirAsia Bhd and AirAsia X Bhd, pushing the lowcost airlines’ shares higher yesterday.
Aviation analysts, however, said the possible exercise would likely provide only minimal cost savings to AirAsia and AirAsia X.
They believe there would only be marginal recalibration benefit between AirAsia and its affiliate AirAsia X as both have already established their markets for the medium- and long-haul segments.
Shares of AirAsia and AirAsia X rose in active trade yesterday following a series of tweets from AirAsia group chief executive officer Tan Sri Tony Fernandes.
At 9.22am, AirAsia was up 1.06 per cent to RM3.81 with 1.83 million shares traded, while AirAsia X edged up 0.5 sen to 38.5 sen with 6.33 million units done.
At the close of trading, AirAsia rose five sen to RM3.82 with 15.01 million shares changing hands. AirAsia X improved one sen to 39 sen with 32.72 million units transacted.
Fernandes, in his tweets, said AirAsia would be transferring routes that take more than four hours to AirAsia X as the former has matured and can use the capacity for more profitable shorter-haul routes.
He described the exchange of routes as a win-win situation for both airlines and also predicted this year would be good for AirAsia X with a further route reallocation and reduction in costs.
“Cleaning up the balance sheet in AirAsia X as we start the fourth quarter. (The year) 2018 looking good,” Fernandes tweeted.
He also said that AirAsia X was not interested in the long-haul markets, such as Berlin and London, as it felt such markets were not ready, and would remain firmly focused on medium-haul routes.
An analyst said while AirAsia had taken on routes that are less than four hours and AirAsia X more than four hours, any route outside the category would probably be limited.
“Most of the routes are already less than four hours for AirAsia. I don’t think there are many routes that need more than four hours as most of them have been transferred to AirAsia X.
“There were initial plans to expand in Europe, but given the heavy competition, it was decided not to be introduced. It was a very wise decision,” said the analyst.