Posted by PlsGiveBonus > 2016-11-27 17:39 | Report Abuse

Fast fast abandon this falling ship
:)

Posted by VenFx > 2016-11-27 17:42 | Report Abuse

Now, icon8888 debate with the real international gang , Salute .

Posted by skng74 > 2016-11-27 17:43 | Report Abuse

As always, thanks Icon8888 for clearing the air. I was honestly quite confused after reading that Bloomberg's article.

Posted by elbrutus > 2016-11-27 17:43 | Report Abuse

Icon8888....this latest write up of yours....harap can mke me sleep better leh....tq

Posted by shortinvestor77 > 2016-11-27 17:57 | Report Abuse

Icon don't want to see share price drops to 70 cents started tomorrow. Can he rescue the scenario? Let's wait and see.

Posted by PlsGiveBonus > 2016-11-27 18:01 | Report Abuse

I would only start collecting again when it drop to something below 1.00
:)
Buy queue at 1.00, 0.90, 0.80, 0.70...
May be it would come before the 2017 end
2018 sound like a very bad year to me

Posted by VenFx > 2016-11-27 18:02 | Report Abuse

Snipers on position, to run the pressure test for T.F ...
Bigger field , bigger game .

Posted by elbrutus > 2016-11-27 18:07 | Report Abuse

OMG...definitely alot of sinkalans out there....lols

Posted by ronnietan > 2016-11-27 18:10 | Report Abuse

From your table, passenger seat sales in Sept '16 Q were RM1.078 bil while total expenses, excluding Asia Aviation, were RM1.067 bil, ie ticket sales barely covered expenses.
But that's not a bad state, as it makes a lot from ancillary income and leasing.
Like selling newspapers at RM1.20 doesn't cover production cost.
The problem the Bloomberg writer pointed out is the effect on total operating income after a sale of Asia Aviation. He did say ancillary income's growing.
After all, Tony said "Don't look at us as an airline. We are a supermarket." (quoted in edgemarkets).

Posted by stockmanmy > 2016-11-27 18:27 | Report Abuse

The bigger and more threatening accusation is that the leasing income in the PL for all these years is not leasing income but actually borrowings disguised as income.

How does it work?

AA through bulk purchases got discounted planes. It sells these planes to a lessor ( international lessors , not associates) for a profit , do a sale and lease back.

AA got financing, got cash, profits and lease commitments. ...an off Balance Sheet obligation , the profits credited as leasing income.

The accusation is that AA have been doing this for years , financing AA while it grows up. ..and more seriously, jacking up the PL to boost share price.

Now, the baby has grown up, can stand on its own feet....and time to stand on its own feet.


but really......can someone artificially propped up can really stand on its own feet....this is the real question the Bloomberg article wants asked.

Posted by helloworld123 > 2016-11-27 18:32 | Report Abuse

thank you icon8888 for the analysis. good indeed!

Posted by elbrutus > 2016-11-27 18:37 | Report Abuse

hallo hallo...apa macam sekarang ??? Bloomberg atau Icon8888 betul ??? any neutral party care to comment ??

Posted by elbrutus > 2016-11-27 18:44 | Report Abuse

looks like 1st round to Icon8888

Posted by VenFx > 2016-11-27 18:45 | Report Abuse

Common lah, Stocknanny .
U hardly differentiate what gender of Felix, now talking about Aviation / plane ?

Posted by elbrutus > 2016-11-27 18:46 | Report Abuse

come on guys...give Icon8888 a worthy fight...we need INPUT !!!

Posted by calvintaneng > 2016-11-27 18:52 | Report Abuse

http://klse.i3investor.com/blogs/icon8888/87883.jsp

chantp88 dolmite in red last QR...i guess dynamite blown in our faces.... :((
25/02/2016 22:44

After Dolomite the Dynamite that blasted will be AAX & AirAsia

Air Asia?

Catching "Air" in Asia?

Great the Depression,
Global the Recession;
Many a millionaire
Jumped, clutching the air.

Millions flown away
Fortunes gone astray,
Bursa in retreat,
Bulls by bears were beat.

Hard the lessons learnt;
Fingers - more - were burnt;
Conman has done his job
All are finally robbed!

Posted by stockmanmy > 2016-11-27 18:53 | Report Abuse

Go read the Bloomberg article., ven.....


Bolo berg accuses AA for reporting borrowings as income.

What is Tony's response?

Will Tony respond only when share price go below $2 ?

Posted by VenFx > 2016-11-27 18:57 | Report Abuse

I would love to cacth this A.A. flight, since i missed it before.
Census given from DBS to A.A. is $3.40 if my memory correctly.

Posted by helloworld123 > 2016-11-27 19:07 | Report Abuse

if tony were to answers all the articles (good and bad) out there abt airasia then he wouldn't have the time to manage the company!

Posted by SharkTank > 2016-11-27 19:25 | Report Abuse

As always, very insightful and technical. I had this same line of thinking on AAC disposal but in no way could I put it in such an eloquent and technical writing. Thank you indeed.

Posted by SharkTank > 2016-11-27 19:28 | Report Abuse

I would also think that to an extent they could still have some income from leasing by a minor leasing business of some planes if there is excess post AAC disposal and this might slowly grow in time as balance sheet becomes stronger and stronger and planes start to increase in number.

Posted by calvintaneng > 2016-11-27 19:36 | Report Abuse

Posted by OTB_kengchau > Nov 27, 2016 07:22 PM | Report Abuse

Why Calvin doesn't change despite OTB advise?
http://klse.i3investor.com/servlets/cube/post/tbooi1168.jsp

Hope he can improve after reading this posting. It is not an attack, I say it out sincerely from the bottom of my heart.

Thank you.
Ooi

Calvin appreciates OTB kind admonition

Last time Calvin stood aside in Regain Capital Choco Passenger Forum.

By so doing I tolerated Conman there to cheat all the water fish, sorchai, ikan bilis & sotong there

Today, more than 90% of the i3 forum members there have disappeared because they have lost all their monies!

See

http://klse.i3investor.com/servlets/discuss/608510.jsp

Again if IFCA Forum

AlphaTrader with nancytang, chrischan, orionpacific & others led so many to holland.

IFCA crashed from Rm1.87 to only 29 cts today.

And another 90% of those who went GaGa over IFCA have stopped posting in i3 Forum.

This is a big blow & loss to so many innocent people led astray buy charismatic con man in i3 forum. Today Mikekong55 @ Newman has fled!

AlphaTrader also no longer active!

My Johor Sifu warned me that Uncle KYY also got his syndicates here. Is OTB one of them? I really don't know.

And so I will continue to warn and save newbies from all overvalued & other con man stocks.

To whom shall I obey?

To my own conscience or the approval of fickle minded men? Or con man?

Posted by stockmanmy > 2016-11-27 19:53 | Report Abuse

PW will know the truth
Tony will know the truth

How about an explanation from them.?

Posted by stockmanmy > 2016-11-27 19:56 | Report Abuse

Go read the Bloomberg article., ven.....


Bolo berg accuses AA for reporting borrowings as income.

What is Tony's response?

Will Tony respond only when share price go below $2 ?

Posted by VenFx > 2016-11-27 20:00 | Report Abuse

Calvin, show us your valid points first.
Your points are mostly despicable, i found.

Posted by calvintaneng > 2016-11-27 20:06 | Report Abuse

Posted by VenFx > Nov 27, 2016 08:00 PM | Report Abuse

Calvin, show us your valid points first.
Your points are mostly despicable, i found.

Calvin replies:

Ok, at your service.

Will post the vital points soon.

Stay tuned...

Posted by VenFx > 2016-11-27 20:09 | Report Abuse

Hope your so call vital points, not end up another animation story ...

Posted by kpfam > 2016-11-27 20:11 | Report Abuse

Calvin is Koon's shoe licker.

He dutifully reposts Koon's blog in i3 since the old egotist can't do it himself without losing big face.

Has he strongly criticised KYY?

He attacks all other regular bloggers at every opportunity.

Posted by calvintaneng > 2016-11-27 20:20 | Report Abuse

Posted by kpfam > Nov 27, 2016 08:11 PM | Report Abuse

Calvin is Koon's shoe licker.

He dutifully reposts Koon's blog in i3 since the old egotist can't do it himself without losing big face.

Has he strongly criticised KYY?

He attacks all other regular bloggers at every opportunity.

Calvin's response:

A BIG FLAT NO

Calvin said this before in case you all missed

1} Koon Yew Yin stands for

Koon as in "kun" kun means royalty in Chinese

Yew yin sounds like yau yi or affinity

So Koon Yew Yin means KYY has helped many poor students on scholarships

This is good

Or

2) Koon Yew Yin could also mean

Koon as in con (ha! a con man)

Yew Yin sounds like yauyi or sotong in cantonese

So Con sorchai, water fish, ikan bilis & sotong

Posted by valuegrowth > 2016-11-27 20:35 | Report Abuse

Icon, thanks for the info.
Very useful insight.
Interesting to noticed that ex-AAC， AA's operating lease expense is only RM19mil. Meaning that roughly about 4~5 aircrafts are leased from other lessor.

Posted by YLR33 > 2016-11-27 21:29 | Report Abuse

noticed that the capital commitment off interim report is about 92,000m (clause 20 of interim report) 9month profit is about 1570m, simplyfied it say 2000m profit annually, can we say it need 42years profit just to pay off the said capital committent (assume profit growth offset by debt interest increment) ? if it is, 42yeras will be scarely, can sifu out there share your knowlegde on this?

Posted by supersaiyan3 > 2016-11-27 21:51 | Report Abuse

I came across Airasia stock years ago after reading a book "Airasia Story". I thought: "Wow, its really making money, amazing!" Fatt tat loh
At that time, Airasia was just about to start KL - Singapore, after Tony publicly lobbying the government for a while. At that time, they book "deferred taxation" as income, and was making roughly 800m a year. I thought: " Fatt tat loh". After KL-SG, should make at least 2b a year. But it didn't.
Then Airasia starts their regional expansion, i thought after AAT listed, fatt tat loh, but....
Then oil price starts falling, RM2.9x is the highest.
i went to a AAX IPO, Tony said Airasia should worth RM6. Bullshxt.....

Now MYR starts to fall again, next quarter figure will look less than satisfactory.

風緊，扯乎！

Posted by valuegrowth > 2016-11-27 21:53 | Report Abuse

YLR, capital commitment is not a loss by default.
For example, I have a commitment with Petronas to buy 1m barrel of oil at 50usd per barrel, that's 50m USD for a guy who earn maybe 50k per year. I would need 4000 years of income to pay it.
However, let say at 2020 oil price is USD1000, then actually I make profit of 50mil by selling it.
So it's not a correct way to see capital commitment as loss.
In AA's case, do you think Airbus will agree for the contract if they think >50% chance AA can't pay for it?
10 years ago, AA is just a small LCC have less than 20 aircrafts and they make a 150 aircrafts order. They make it today.
400 aircrafts order for a 173 aircrafts LCC today is just a merely 2 times their current size, and AA have a 3bil population market to grow.

Posted by valuegrowth > 2016-11-27 22:23 | Report Abuse

VLR, to add,
1. your 42 years is base on AA has a fixed annual avenue of 2000m and will never grow. In actual fact, AA's revenue is growing at CAGR rate of 10%, at this rate it will take 18 years.
2. when AA take delivery of an aircraft, they will recognise the asset and borrowing in Balance Sheet, but in Income Statement, they will recognise this cost as depreciation, probably over 20 years.
3. For AA, Tony Fernandes prefer to sell the aircraft when it reach about 12 year old, before maintenance cost start to raise dramatically. At this time, there will be a one-time gain. (note that AA get a big discount for their aircraft purchase, which mean even if they sell an aircraft even at delivery, they will actually make a few million USD gain.)
Hope above help for your study.

Posted by kungfee > 2016-11-27 22:46 | Report Abuse

Icon, good sharing info. Many thanks!

Posted by valuegrowth > 2016-11-27 22:46 | Report Abuse

Hi VLR, my appologise, please ignore #1 above which is a mistake.
AA is taking aircraft delivery as borrowing and they are repaying it with cash flow. In other word, net profit we get from IR is inclusive of those repayment.

Posted by r°Moi > 2016-11-28 14:01 | Report Abuse

.


Aviation is capital intensive..... borrowing... goes without saying

It is just whether it is by way of loan or off balance sheet by way of operating lease

So... it is not surprising if Tony has operating leases from 3rd party lessors.... this can see from the operating lease expense




Then.... the next question is...

Where does the airplane in question come from??



The 3rd party lessor got it from airplanes ordered by Malindo?

The 3rd party lessor got it from airplanes ordered by itself?

The 3rd party lessor got it from airplanes ordered by AirAsia?


Must be airplanes ordered by AirAsia isnt it... got discount because AirAsia orders a lot.... powerful




And... so lie the contentious point raised by the article...


How many airplanes have AirAsia sold to 3rd party lessors??

How much were the profits made in selling the airplanes to these lessors?



The article says... A LOT A LOT.... till AirAsia is dependent on it... and this profit will be out of the window.. will follow AAC when it is sold....



.

Posted by paperplane2016 > 2016-11-28 14:02 | Report Abuse

thts why my sifu always said, avoid aviation stock....i am lucky to earn 100% from aviation.......hehe

Posted by sherlock > 2016-11-29 02:29 | Report Abuse

very fair article,good.

Posted by 77huat77 > 2016-11-29 03:44 | Report Abuse

Paperplane you very geng le can't believe your sifu is how geng le

Posted by franky65 > 2016-11-29 20:46 | Report Abuse

I have 50 stocks on my watch list 4 only green today so AA or AAX is not an isolated case so lets stop worrying lets buy some more

Posted by calvintaneng > 2016-11-29 20:50 | Report Abuse

Posted by calvintaneng > Nov 29, 2016 08:48 PM | Report Abuse X

WHOA! PBA GOT FANTASTIC RESULT!!

EPS MORE THAN 6 CTS THIS QUARTER

HAPPY FOR ALL HERE!!

CHUN CHUN CALL OF CALVIN TAN RESEARCH

PBA IS A TSUNAMI SHELTERED COUNTER!!

HIP HIP HOORAY!!!!

YAHOOOOOOOOOOOO!!!!!!!!!!!!!!!!

Posted by supersaiyan3 > 2016-12-04 22:34 | Report Abuse

I ran through the numbers again. Looks like next quarter is still going to be fine. I think the real problem with Airasia is the ticket price too low, i would suggest management to increase the lowest fare by 10-20% but i know they won't listen. I.e. if you book early, charge RM85 lah, doesn't have to be RM49.90, stupid!

You need a lot of big brains to be able to maximum revenue, or else they need something else (say, big data). Also, they did a few things to correct the past management mistakes which is really superb.

I checked Southwest has gross margin of 50-70%, Airasia just selling too cheap, with gross margin of 20-30%.

Calvin, you did raise an interesting question. But if only 70+ airplanes on book, cost less than 400m each, 12 years straight line depreciation, the figure (2000m +-) is correct then.

say 75*400m/12= 2500m+-. Some planes are done depreciation, plus the some discount on purchases, ngam bah.