Capital A to benefit the most from MYAirline's suspension, says Maybank IB

Abrupt end: MYAirline planes parked on the tarmac after the suspension of its service at KLIA2 in Sepang, Selangor. — GLENN GUAN/The Star

KUALA LUMPUR: Malaysia Airports Holdings Bhd (MAHB) is expected to be mildly negatively impacted on fewer passengers and potential provision for doubtful debts following the suspension of MYAirline Sdn Bhd's (MYAirline) operations, said Maybank Investment Bank (Maybank IB).

In its research note today on Malaysia Aviation, it said AirAsia X Bhd (AAX) would not be impacted at all while Capital A Bhd stands to benefit the most via higher fares.

"Based on our earnings estimates, we are making 'Buy' calls on MAHB and AAX, and maintaining 'Hold' on Capital A.

"Yet, investors ought to look out for Capital A’s fourth quarter (4Q) 2023 results which may be boosted by high fares," said Maybank IB.

Its 'positive' call on Malaysian aviation remains unchanged.

After less than a year of operations, MYAirline (not listed) on Oct 12, 2023 suspended its operations due to significant financial pressures and the suspension is pending shareholder restructuring and recapitalisation.

Hitherto, MYAirline was operating nine Airbus A320s configured with 180 seats.

Its business model was very similar to Capital A’s in that it was operating as a low-cost carrier flying to domestic and Asean destinations. - Bernama