AirAsia X seen most af­fected by new air­port tax

The Sun (Malaysia) - - SUNBIZ -

PETAL­ING JAYA: PublicIn­vest Re­search ex­pects AirAsia X Bhd (AAX) to be the most af­fected by the new pas­sen­ger ser­vice charge (PSC) tier for travel to Asean coun­tries ef­fec­tive Jan 1 next year, an­nounced by the Malaysian Avi­a­tion Com­mis­sion (Mav­com) on Mon­day.

In a re­search re­port yes­ter­day, its an­a­lyst Nur Farah Sy­i­faa’ Mo­hamad Fu’ad said this is be­cause AAX routes were mainly for the Aus­tralian and North Asian re­gions, where the PSC rate hike for in­ter­na­tional ex­clud­ing Asean would in­crease by 56% to RM50, from RM32 cur­rently.

How­ever, Nur Farah said the rate hike would not di­rectly im­pact AAX earn­ings, as the PSC is borne by the con­sumers.

“Nev­er­the­less, we re­main cau­tious on slower con­sumer spend­ing and travel de­mand from Malaysia, which might give some pres­sures to­wards its pas­sen­ger growth go­ing for­ward.”

“Pend­ing more details from the man­age­ment and its earn­ings an­nounce­ment for Q3FY16, we main­tain our earn­ings fore­cast,” she noted.

On a sep­a­rate note, Nur Farah said the re­search house ex­pects AirAsia Bhd to be less af­fected as the routes flown are spread within the do­mes­tic and Asean re­gions.

The rate for do­mes­tic flights would rise from RM6 to RM11 for do­mes­tic, while Asean flights would in­crease by 9.4% to RM35, from RM32 pre­vi­ously, Nur Farah said.

“Pend­ing more details from the man­age­ment and de­tailed re­sults for Q3FY16, we main­tain our earn­ings fore­cast for now.”

Mean­while, she said the airline’s op­er­at­ing sta­tis­tics for the third quar­ter 2016 (Q3FY16) was within the re­search house ex­pec­ta­tions, where Malaysia AirAsia achieved a load fac­tor of 89.3%, up 2.5 per­cent­age points, com­pared with the pre­vi­ous quar­ter of 86.8%.

PublicIn­vest main­tained its “neu­tral” call on AirAsia with a tar­get price of RM2.50, pegged on 8 times FY17F earn­ings per share, based on en­larged share cap­i­tal, in­clud­ing the pro­posed share place­ment to Tune Live Sdn Bhd.

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