PublicInvest maintains outperform, TP on AirAsia

US private investment firm Castlelake LP has struck a deal to buy a portfolio of about 30 narrowbody planes from AirAsia Group Bhd for a total price of roughly US$800mil (RM3.34bil).

KUALA LUMPUR: PublicInvest Research maintained its forecast and outperform call on AirAsia Bhd following the release of the airline's 3QFY18 operating statistics.

It kept its target price of RM4.14 pegged on 13x FY19F earnings per share.

AirAsia's consolidated operations had reported a decline in load factor of 5ppts year-on-year to 81.6% although its passengers' volume surged 9% y-o-y to 10.8 million. 

This was due to the group's available seat per km (ASK) growing 10.3% y-o-y, exceeding the increase in passengers carried. 

However, PublicInvest said this fell within its expectations, accounting for 76% of its FY18 forecast. 

Operations in Malaysia and the Philippines posted lower load factors of 82.5% and 76.7%. This was owing  to tighter competitio in Malaysia and strong capacity expansion in the Philippines.

Indonesia, meanwhile, posted the strongest load factor for the year at 82.3% despite the natural disasters in the country.

Among AirAsia associates, Thailand reported a lower load factor of 80.1% and passenger carried declined 3.5% quarter-on-quarter due to seasonality, competition and fewer Chinese tourists due to the Phuket ferry incident. 

In India, AirAsia reported a lower laod factor of 76.2% in the quarter due to aggressive capacity expansion as it plans to start flying international next year.

Japan posted the strongest load factor of 88.6% with traffic volume and seat capacity surging 41% and 26% q-o-q respectively.