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Published on Business Times:

• AirAsia, Lion Air chiefs play down rivalry
  
  Published: 2013/03/23
  
  KUALA LUMPUR: AirAsia boss Tan Sri Tony Fernandes questioned his rival's growth plans after Lion Air struck a US$24 billion (RM75 billion) Airbus order while pledging to preserve his own ties with the European jetmaker.
  
  As competition intensifies between Southeast Asia's largest budget carriers, Lion Air co-founder Rusdi Kirana shot back by targeting sharp growth in AirAsia's domestic Malaysian market.
  
  In a realignment of industry loyalties, Indonesia's Lion Air loosened exclusive ties with Boeing this week to place a 234-plane order with Airbus, which is also sole supplier to AirAsia.
  
  Asked if he was upset about the blockbuster deal between his top supplier and his closest rival, Fernandes said, "Why should I be? I think Lion has probably bitten off more than it can chew. We are focused on ourselves".
  
  Lion Air co-founder Rusdi mocked any suggestion that the airline had over-extended itself.
  
  "Is he an angel? Does he know the future?" Rusdi said when asked about Fernandes's comments.
  
  The two airline chiefs discussed the deal in separate interviews.
  
  Lion Air launched its services in Malaysia yesterday through a partially owned venture, Malindo Air, while AirAsia says it is filling planes successfully in Indonesia.
  
  Rusdi said Malindo hopes to operate 100 Boeing aircraft within 10 years.
  
  The rapid rise of both airline groups has been channelled through exclusive partnerships with jetmakers Airbus and Boeing - making the two airline bosses star players in a broader power struggle in the US$100 billion jet industry.
  
  Those battle lines were abruptly redrawn when Lion Air announced the Airbus order in Paris on Monday, doubling up on a similar order placed with Boeing just over a year ago.
  
  AirAsia has taken delivery of more than 100 Airbus A320 aircraft out of a total of 475 it has ordered.
  
  Airlines can save money by running one type of fleet but can also obtain good pricing by forcing suppliers to compete.
  
  Fernandes, who bought AirAsia together with its fleet of two Boeing 737s in 2001 and then built it into the largest operator of Airbus A320s, pledged to stick with the European planemaker.
  
  Asked whether he might consider Boeing for future orders, he reiterated he wanted to stick with one type of aircraft. The Malaysian entrepreneur studied new jets from Canada's Bombardier before striking his most recent Airbus deal, however.
  
  "I run a proper business not an emotional business," Fernandes said in an electronic interview.
  
  "They have to sell planes. How can I stop them?" he said of Airbus's three-year courtship of Lion Air.
  
  Low-cost airlines prefer operating one type of aircraft to reduce the cost of parts and separate crews. But the sheer size of some of the world's largest fleets has raised questions over whether one supplier can meet the needs of the largest airlines.
  
  Air Berlin and Norwegian Air have a mixed portfolio of jets.
  Bankers and lessors have expressed concerns that a series of record-breaking orders risks flooding Southeast Asia with too many narrowbody planes, despite projections of sharp growth.
  
  "The world is big. There is a lot of space for everybody. We should accept that competition is normal," Rusdi said.
  
  Asia is expected to double its fleet in the next 20 years. Reuters

Tony said Lion Air had bitten off more than it can chew???

Haha!

It was just on Thursday that Tony Fernandes said ‘Asia can take a LOT of planes.’

• “There are 3 billion people in Asia, there are 300 million people in America. America has about three times more planes right now than Asia,” Fernandes said in a Bloomberg Television interview at the Credit Suisse Asian Investment conference in Hong Kong yesterday. “So it can take a lot of planes.”

Yeah, if Asia can take a lot of planes, why make comments like Lion Air 'had bitten off more than it can chew?'

Why?

I have always questioned about Business Times's choice of article titles.

Here's the screen shot of today's Business Times article.

 As mentioned on Business Times, this article originated from Reuters.

For some strange reason, I decided to read Reuters article too. Dunno why. :P

http://www.reuters.com/article/2013/03/21/us-airasia-lion-idUSBRE92K0QU20130321



As you can see the article is the same!!!!

Only difference is the title!!!

The original title from Reuters is "AirAsia, Lion Air bosses spar over plane orders".
Business Times however decided the title should be "AirAsia, Lion Air chiefs play down rivalry".

Don't you wonder why Business Times always have to be so creative with its article titles?

Published on Star Business:

• Thursday March 21, 2013
  Asia can absorb more aircraft, says AirAsia chief Tony Fernandes
  
  HONG KONG: Asia will be able to take in more aircraft as economic growth and a population of more than 3 billion people will sustain travel demand, said AirAsia Bhd group chief executive officer of AirAsia Tan Sri Tony Fernandes.
  
  “There are 3 billion people in Asia, there are 300 million people in America. America has about three times more planes right now than Asia,” Fernandes said in a Bloomberg Television interview at the Credit Suisse Asian Investment conference in Hong Kong yesterday. “So it can take a lot of planes.”
  
  The comments come after Indonesian budget carrier PT Lion Mentari Airlines ordered 234 aircraft from Airbus SAS this week its second commitment to purchase more than 200 planes in two years stoking concerns of overcapacity in Asia. More than a dozen budget airlines began operations in Asia-Pacific in the past 15 years as economic growth in China, India and South-East Asia enables more people to fly for the first time.
  
  The growing population in Asia was expected to help fill the planes, said Fernandes, whose AirAsia group expected to carry 43 million passengers this year. Eleven years ago, the airline carried 200,000 passengers, he said.
  
  “I wouldn't say there are too many planes in Asia,” Fernandes said. “We have 500 planes and we fly in six countries. Lion Air is in Indonesia and a hybrid in Malaysia. Asia can take the planes they have and we have.”
  
  Discount carriers have secured about a quarter of the region's air travel market in the past decade. The region will account for 33% of global passengers in 2016, according to the International Air Transport Association, and HSBC Holdings Plc has said four out of five airports in Asia are operating at or above their designated capacity.
  
  AirAsia has grown into Asia's biggest discount airline since its takeover by Tony Fernandes and partners in 2001. The carrier has set up ventures in the Philippines, Japan, Thailand, India and Indonesia.
  
  In 2011, AirAsia ordered 200 Airbus A320neo aircraft valued at US$18bil (RM56.2bil) in the biggest order for the planemaker.
  
  Lion Air, which serves more than 36 destinations, is establishing a low-cost carrier in Malaysia to challenge AirAsia, Airbus's biggest A320 customer. Low-cost carriers are increasing their fleet as air travel is expected to grow more than 6.4% annually through 2031.
  
  Lion Air already has 700 planes on order and expects to have ordered 1,000 planes within “two to three years,” president Rusdi Kirana said on March 18. The Indonesian carrier ordered 230 Boeing Co 737 planes last year.
  
  AirAsia planned to pick an engine for the 100 A320 planes it ordered from Airbus by April 18, Fernandes said. - Bloomberg

 Comments: Just for the record of what's being said.

On the Edge last night:

• BA Merrill Lynch pegs AirAsia low at RM1.85 Business & Markets 2013
  Written by Ho Wah Foon of theedgemalaysia.com
  Wednesday, 06 March 2013 17:30
  
  KUALA LUMPUR (Mar 6): Bank of America Merrill Lynch (BAML), saying it is keeping its “negative” stance on AIRASIA BHD [] ahead of the general elections, has given a price objective of RM1.85 to the airline -- a 37.5% discount to its last traded price of RM2.96.
  
  The research house said: “We believe increased news flow over Malindo’s launch in the coming weeks and fears of how severe the resulting price erosion will be, as well as uncertainty over the upcoming Malaysian elections, will keep the stock under pressure.”
  
  BAML, which released this analyst report after a meeting with AirAsia’s management at ASEAN Stars Conference 2013 in Singapore today, said:
  
  “Malindo entry is a key concern....Given the imminent start of new rival Malindo in its home market in Malaysia, AirAsia’s stock price could face an intensification of headwinds in the coming weeks.”
  It noted Malindo has received its Air Operators Certificate last week and is on-track to launch its operation within the next two months.
  
  It added that although AirAsia is ramping up its capacity aggressively, it is “doubtful” that these additional seats can be filled at the same unit revenues.
  
  Noting that Malindo Air launch means even more capacity added, the US research house said: “In addition to AirAsia's growth plans, we expect the pricing environment to see added downward pressure with the Malaysian-based LCC fleet swelling by 30% in 2013.”
  
  The research house also commented that AirAsia’s management “looks increasingly thinly spread”.
  
  It noted that Japan and the Philippines are still loss-making and its proposed venture in India is likely to consume significant time.
  
  “While Indonesia had a good 4Q results aided by seasonality, Thai AirAsia remains the star performer among associates due to a lack of domestic competition, with its holding company Asia Aviation our preferred LCC play in the region.”
  
  BAML said its PO of RM1.85 is based on 6x recurring PE for 2013E, inclusive of recognised and unrecognised associate profits and losses.
  
  “This is a trough valuation multiple reflecting our expectation of a sharp decline in earnings through 2014 as main rival Lion Air aggressively expands in Malaysia,” it said.

My comments?

As mentioned several times, I had noted the improvement in AirAsia balance sheet back in 2010. ( You can refer  this posting And what about AirAsia's earnings? ) But all this 'good work' is undone when it announced back in 2011 it's new air craft purchases. ( Refer: How Is AirAsia Going To Finance This New Airbus Order? )

It made no sense at all.

AirAsia was already struggling in 2010 to accept new delivery of air crafts.

Back in 2007, AirAsia placed an order of 175 new air crafts. I had felt that order was way too huge. By Aug 2010, I was proven correct.

AirtAsia had to defer acceptance of new air crafts. The new air crafts deliveries was choking its cash flow and balance sheet.. Debts had been increasing astronomically to finance the deliverance of the new air crafts.

So in 2010, after the deferments,  things improved.

AirAsia balance sheet started to improve.

All this changed for the worse again come Jun 2011.

With 90 new crafts YET to be delivered from the 2007 order of 175 new air crafts, AirAsia stunned everyone by placing a new 200 air crafts!

It blew my mind away.

Why the need to rush to place a new order?

They were already struggling with their old and yet they are placing such a new, bigger order.

The amount of capital commitment from this new order is absolutely insane in my opinion.

Capital commitment contracted for now stands at 64 Billion ringgit and I would expect it to increase to some 74 billion or so.

This amount is simply staggering.

And now comes Malindo.

New airline means more compeition.

Can AirAsia manage a new compeitor right now when it is heavily committed to new air crafts?

And mind you, AirAsia total debts currently stands at 8.4 Billion. Debts is now increasing again and it will increase rapidly again with AirAsia committed to all these new air crafts.

Received the following comments from the posting: Months After Its Airport Tax War, AirAsia Decides To Increase Their Fuel Surchages!!!

• weiqiao said...
  
  And AirAsia never update their website information, and never (dare not to) to officially tell the customer about it. Until today 6 April 2012,  http://www.airasia.com/my/en/latestnews/fuelsurcharge.html still stated RM 10 in their website. I made 2 bookings yesterday, but it started to charge RM 15 already!

And that's a crying shame!

How can AirAsia be  making fuel charges without updating their website????

They, AirAsia, had staged war against Malaysia Airport for the airport tax hike!

And here they are, AirAsia, charging NEW fuel surchages without updating their own website.

Sigh!

Try google the phrase 'AirAsia Fuel Surcharge' or http://www.google.com.my/search?q=airasia+fuel+surcharge&ie=utf-8&oe=utf-8&aq=t&rls=org.mozilla:en-US:official&client=firefox-a

Sigh!

It was just recently AirAsia staged a war against Malaysia Airports fighting for the 'consumers' against the airport tax proposal.

One of my post was Featured Article: Why AirAsia Fighting The Airport Tax. In that posting I highlighted an article from Star Biz, AirAsia and Malaysia Airports urged to bury the hatchet and move on.

One statement reflected how strongly AirAsia reacted against the proposed airport tax.

• “To all Malaysians. AirAsia has made flying affordable for all. Before, it was just for the rich. We won't allow Malaysia Airports to keep wasting money and increase charges for you. We will fight. Our campaign starts tomorrow.''

"AirAsia has made flying affordable for all...... We won't allow Malaysia Airports to keep wasting money and increase charges for you. We will fight."

That was the bold statement made on 2nd Dec 2011.

They, AirAsia said they want to make flying affordable. They don't want 'increase charges' for the air travellers consumers.

So they, AirAsia fought and staged their war against the airport tax issue.

Well it's getting really ironic today.

Think about it first.

It was only in May 2011, AirAsia implemented fuel surcharges (ahem! )

Here's the link to the statement made on their website: AirAsia to introduce fuel surcharge on 3 May


Ahem!

Think about it.

They implemented the fuel surcharge on 3 May 2011. They said they will remain committed to being a low-cost model and they will do their best to offset the price hike to their customers.

Would I be wrong to say that this is perhaps one of the reason they staged their war against the airport tax issue. Think about it. They wanted to be a low-cost model. With Malaysia Airports increasing the airport tax, that would surely affect the pricing, yes? Hope my reasoning is not wrong.

But anyway, that's the past.

It's now only March 2012. About 3 months after the airport tax war.

Yesterday, 28 March 2012, RHB wrote an article saying AirAsia would increase their fuel surcharge by 30-50%!!

Yes, by 30-50%!!!!!!!!!!!!!!!!!!!

Whatever happened to their 'committment' to keep their prices low?

Here's the snippet of the research report.



Note: Yeah, due to this fuel surcharge, RHB reckons that this fuel surcharge hike will boost AirAsia profits by 8-11%!

YES!!!!!

RHB Research reckons AirAsia profits will increase!!!!!!

What the .......................

And here's table 2 which highlights the fuel surcharge increase.



What the .................................

Domestic flights will be increased by rm10 to rm 15??????

A 50% price increase?????

And there's no fuel surcharge for domestic flights in Thailand and Indonesia???????

What the ..............................

How can it be??????

Why no fuel surcharge in Thailand? Is it influenced by any way by the proposed listing of AirAsia Thailand????

What's happening here????

And the drama continues. On the Sunday yesterday: MAHB: AirAsia asked for bigger KLIA2

• Sunday December 4, 2011
  MAHB: AirAsia asked for bigger KLIA2
  By B.K. Sidhu
  
  PETALING JAYA: Malaysia Airports Holdings Bhd (MAHB) has fought back to say that it was building a bigger KLIA2 upon the request of its biggest customer, AirAsia.
  
  It broke its silence after being criticised by AirAsia boss Tan Sri Tony Fernandes for building KLIA2 to cater to 45 million passengers, thus inflating the cost to RM4bil.
  
  On its website, MAHB posted a document titled Why KLIA2 has to be bigger? which showed that AirAsia had estimated that passenger traffic at the new terminal would hit 28.7 million by 2015, 45.3 million by 2020 and 60.3 million by 2025.
  The figures were more aggressive than MAHB's own projections for the same period, according to a graph included on the website.
  
  MAHB said the new airport would cost between RM3.6bil and RM3.9bil and that AirAsia had asked for a fully automated baggage handling system from a semi-automated system, which caused the six-month delay in opening the airport.
  KLIA2 will only be ready in April 2013.
  
  AirAsia chairman Datuk Aziz Bakar said yesterday “we had requested MAHB to start thinking of building a bigger KLIA2 and to expand its capacity to cater to 45 million passengers since there has been a series of delays in the completion of the airport. The initial plan was for the airport to handle 30 million passengers and be completed in 2011”.
  
  “(Now) if they do not start preparing for more passengers then we will not have the capacity as we anticipate to achieve 30 million passenger growth by 2015/16,” he said.
  
  On the fully automated baggage system, Aziz said: “We had asked for a semi-automated system but MAHB decided on a fully automated system and we agreed to it.”
  
  The controversy over the bigger airport has also sparked speculation over Tan Sri Bashir Ahmad's future in MAHB.
  
  This led the market to speculate that he was supposed to meet Khazanah Nasional Bhd boss Tan Sri Azman Mokhtar yesterday. It could not be ascertained if the meeting took place.
  
  Khazanah is a major shareholder with 54% stake in MAHB, and when contacted, its spokesman Mohd Asuki Abas said “we do not comment on speculation”.
  
  On Friday, MAHB chairman Tan Sri Dr Aris Othman said Bashir had the full support of the management and board, quashing rumours the latter would be replaced.

See also: MAHB: AirAsia asked for bigger KLIA2

Me say?

AirAsia wants badly to market itself as a low-cost aircraft. However, to maintain its CHEAP look, it has separated a lot of charges from its ticket prices. When you use your credit card, AirAsia imposes an additional charge. Hello bankers! Aren't your merchants prohibited from making those charges? And then there's that idiotic check-in counter charges, which is the worst charge of the lot. What kind of charge is that?

Yeah, I think AirAsia should take a good look at itself first.

Good article posted on Business Times:

• Why AirAsia is fighting airport tax hike
  
  By Presenna Nambiar Published: 2011/12/03
  
  AIRASIA Bhd could be bent on challenging airport operator Malaysia Airports Holdings Bhd's (MAHB) airport tax hike as a means to combat its own fast-rising charges.
  
  Checks done by Business Times showed that the gap between Malaysia Airlines and AirAsia's long haul arm AirAsia X fares is fast closing in on a few routes.
  
  A check on fares for London in January showed the fare difference between the two airlines was less than RM1,000.
  
  For example, on both MAS and AirAsia X fares (excluding fees and taxes) for a return trip to Paris in January showed that MAS' fare was RM1,841 while AirAsia X's fare was RM2,108 (excluding baggage and meal charges) for return.
  
  The differentiating factor, however, was its fees and taxes. MAS' charges stood at RM1,359 while AirAsia X's charges were RM606.
  
  
  
  
  The increase in fees in AirAsia X are from a RM80 (return) carbon offset surcharge to be implemented in 2012.
  
  It is believed that this charge is connected to the European Union Emissions Trading scheme, which comes into force January 1 2012.
  
  The ruling requires airlines to pay up for carbon emissions, which have not been accounted for, in its air space.
  
  "It could be because of all these charges that are coming up now. I guess they don't want to add on any other charges that don't actually help ease their own costs," an analyst who declined to be named said.
  
  On claims that MAHB was profiteering from passengers, another analyst pointed out that a quick calculation of profit against number of passengers handled would show which company profits more from passengers.
  
  A check showed that according to 2010 profit before tax (PBT) figures, AirAsia makes twice more money from passengers than MAHB.
  MAHB made RM445 million in PBT for 2010, while AirAsia earned some RM1.1 billion in PBT.
  
  According to this, AirAsia made RM42 per passenger, while MAHB earned RM15 per passenger. Only half of the 57.8 million passengers handled by MAHB are taken into account as it only collects airport tax one way.
  
  "AirAsia is not being inconsistent to itself. Before it complies it's always visibly shown how unhappy it is. I think at the end of the day however, it will follow the letter of law and pay up if they have to," Maybank Investment Bank Bhd analyst Mohshin Aziz told Business Times.

The following was published on Star Biz yesterday.

• Friday December 2, 2011
  AirAsia and Malaysia Airports urged to bury the hatchet and move on
  Friday Reflections - By B.K. Sidhu
  
  IT does not look like the fight between Tan Sri Tony Fernandes and Malaysia Airports Holdings Bhd (MAHB) is going to end any time soon.
  
  On Wednesday night, a day after MAHB explained why it would cost RM3.6bil to RM3.9bil to build KLIA2, AirAsia boss Fernandes fired yet another salvo. This time, his target was not the use of aerobridges, the high cost of KLIA2 or the MPs who questioned the AirAsia-MAS share swap. Instead, he was gunning for the rise in passenger service tax (PSC).
  
  In his tweet, he said: “To all Malaysians. AirAsia has made flying affordable for all. Before, it was just for the rich. We won't allow Malaysia Airports to keep wasting money and increase charges for you. We will fight. Our campaign starts tomorrow.''
  Yesterday morning, many AirAsia customers received an e-mail with the headline “Say NO to AIRPORT TAX INCREASE.'' This is the latest effort by Fernandes to garner support against MAHB over the airport operator's recent move to raise the PSC.
  
  Initially, AirAsia was against collecting the PSC on behalf of MAHB. However, yesterday, the airline announced that it would continue to do so. Interestingly, it was MAS AirAsia's new partner that first wrote to MAHB to say it wouldn't collect the PSC effective Dec 1. Not long after that, it reversed the decision. Similarly, AirAsia's sister company, AirAsia X, had also send a similar letter to say it would not collect, but as soon as it was faxed over, it was withdrawn.
  
  To recap, airport tax is imposed by the airport operator and is regulated by the Government. The world over, any traveller wanting to depart from any airport has to pay taxes for the use of airport facilities. The rates vary from country to country.
  
  MAHB only got to raise the PSC after nine years of trying to convince the Government to give the greenlight. The new rates are RM25 to RM32 for travel via low-cost carrier terminal, which translate to a RM7 raise, and RM51 to RM65 (RM14 hike) for other airports in the country.
  The next review is due in 2016, said MAHB managing director Tan Sri Bashir Ahmad at a recent briefing. He made it clear that the rate would remain even though the company is building a new airport for low-cost travel.
  
  By turning to the passengers, Fernandes wants the travelling public to be the jury in deciding if the RM7 increase in the PSC is justified. His critics, on the other hand, have pointed out that AirAsia and AirAsia X too have introduced charges that can be a burden, such as the RM10 fee for counter check-ins.
  AirAsia's very public attacks against MAHB is seen as a power struggle, and in most power struggles, there are losers. The question in this case is what will be the consequences if Bashir loses and what would it mean for MAHB; and if Fernandes loses, what would be his next move?
  
  It is unfortunate that both parties cannot seem to work things out amicably. Perhaps they should spell out exactly why MAHB needs to raise the PSC and why Fernandes is so against the move.
  
  MAHB and AirAsia should remember that both are Malaysian companies, and while both want to be seen to be doing their jobs MAHB needs to make money in managing airports and Fernandes needs to make sure travellers do not pay more they can avoid outburst in the public domain.
  It is about time they bury the hatchet and find a solution that benefits all.
  
  Deputy news editor B.K. Sidhu is amazed at the magnitude of work involved in building KLIA2.

My last update of AirAsia's earnings was done on May 2011 : Update On AirAsia Earnings.

Last night AirAsia reported its earnings. It's earnings wasn't impressive at all. That was expected as a stronger USD will cause huge damage to its books. ( Most of AirAsia's borrowings are denominated in US$ )

Here's some flashback. I think it's rather important to know what has happened.

Well, I had noted the positive changes in the company since Aug 2010.

In the posting , Positive Move That AirAsia Defers Their AirBus Order I had said the following...

• However, let me say this, I have to give AirAsia some credit for eating the humble pie and for successfully persuading AirBus to allow them to defer the delivery of the air crafts and more so, this move really gives them a fighting chance to survive and to overcome their insanity of building a company which was clearly over burdened by the immense corporate debts they took upon to finance the building of their business.
  
  Yeah.. AirAsia should be ok for the next one year or so... yeah.. this is a POSITIVE CORPORATE exercise... it's certainly extremely crucial that AirAsia made this postponement of delivery.... but... deferring is only a postponement.... and in regardless, these air crafts order still needs to be delivered!

And AirAsia the stock had done fairly well since then.

On 4 Dec 2010: A Look At AirAsia Stellar Earnings.

The positive moves from the deferment of the aircrafts was visible on the balance sheet. I made the following remarks.

• The cash/debt level, has it improved?
• The c.c or capital commitment column 'improved'. Would I pay attention to the value? Or should I pay attention to the number of aircraft to be delivered?

On 24 Feb 2011: What Do You Thnk Of AirAsia's Earnings?

• Cash actually improved a lot compared to the previous quarter.
• And debt increased slightly.
• But the capital commitment... there was a huge improvement, yes?

I was focused on the improvement in the balance sheet.
 
For me, this is the MOST crucial thing. AirAsia used the debt leverage game to build its empire. Instead of just borrowing, it BORROWED. Way too hedge and in my opinion, it's like it's building a corporate which will be too huge to fail. And the massive borrowings is of course used to finance that rather insane order of aircrafts. Capital commitment contracted to purchased new aircrafts at one time stood close to 28 billion ringgit. ( do refer fy 2007 earnings ) and with AirAsia already saddled with a debt of 3.7 billion then (in fy 2007), the risk was so huge. My mind was thinking, how was AirAsia going to repay the debts, let alone finance its rather grossly optimistic aircraft purchase. That was my reasoning.
 
But as mentioned in Aug 2010, when AirAsia deferred its aircraft delivery, it gave itself a chance to survive. By not accepting new aircraft delivery, its loans ( which now has ballooned to some 7.8 billion - remember back in fy 2007, AirAsia loans was only 3.7 billion! - yeah it's loans doubled!!) stopped growing. The cash flow from AirAsia's operations is now used to rebuild its piggy bank and it also managed to pare down its debts. ( Ah.. that one private placement of shares did helped its balance sheet too!)
 
The chances could be seen.
 
Then came June 2011. 
 
Another historical purchase order of aircrafts was made.
 
It blew my mind. 
 
At that moment of time, out of an order of 175 new aircrafts, AirAsia only receive 89. Yeah remember in Aug 2010, it had to get a deferment in aircraft deliveries.  

And less than a year later, in June 2011, after some improvement in its balance sheet, AirAsia did the unthinkable! It ordered 200 new aircrafts!

OMG!

I was thinking what grandiosity!

How will AirAsia finance its aircraft purchase???

Why the need to order so soon and so big??????

It blew my small mind. I was left speechless. So there's where we are at now.

So last night, when I saw AirAsia released its earnings, I was so interested to see its balance sheet.

Here's the updated earnings table I made. C.C stands for Capital Commitment for new aircrafts.




Cash shrunk a little and its debts were relatively unchanged but the most glaring thing is the current capital commitment of 57.450 BILLION!

Exactly!

AirAsia is committed to purchase aircrafts worth some 57.4 billion!

And what does AirAsia currently have in its balance sheet? 1.6 billion cash and loans of 7.6 billion.

And the question on my mind is how will AirAsia going to finance this order of such grandiosity???

On most newspapers (this was taken from thesundaily.my) http://www.thesundaily.my/news/209450

• AirAsia chief launches attack on MAHB on social mediaPosted on 15 November 2011 - 11:19pm
  Last updated on 15 November 2011 - 11:25pm
  
  KANG SIEW LI
  
  PETALING JAYA (Nov 15, 2011): AirAsia chief Tan Sri Tony Fernandes is in the news again, this time attacking Malaysia Airports Holdings Bhd (MAHB) in the social media realm, the same day the airport operator was raising the airport departure tax for international passengers as well as aircraft landing and parking charges for airlines.
  
  Slamming MAHB's move, Fernandes, who is also a director of Malaysia Airlines (MAS), said: "With economic conditions as they are, MAS and AirAsia have given MAHB great ideas to increase their income by working with us and attract more (new) airlines (to operate from Malaysia)... then (MAHB should) reduce (airport) charges to the people.
  
  "It's the passengers who pay airport tax. We are fighting for the people of Malaysia!" he posted on his Facebook page.
  
  Incidentally, AirAsia had scheduled a press conference yesterday to address the hike in airport taxes by MAHB, but had cancelled it at the last minute, "due to an unforeseen circumstance".
  
  MAHB had last month received the Transport Ministry's nod to raise airport tax at the country's 39 airports it manages, excluding low-cost carrier terminals (LCCTs), to RM65 from RM51 for international travellers. For departing international passengers at the LCCT in Sepang and Terminal 2 Kota Kinabalu, the airport tax will be raised to RM32 from RM25.
  
  The aircraft landing and parking charges, meanwhile, will be gradually raised by up to 30% and 64%, respectively.
  
  "Too many empty promises from MAHB. We as airlines get blamed for their poor performance," Fernandes said.
  
  He also took a swipe at the Transport Ministry's decision to approve the hike, asking why it wasn't defending the people "to make sure they get good value for the (old) RM25 airport tax".
  
  "They are the regulators. The ministry's secretary-general, Datuk Long See Wool, sits on the board of MAHB. How can he be objective and play fair to the airlines?" he asked.
  
  Fernandes also questioned MAHB's recent move to build a 3.96km third runway at the new LCCT called KLIA2 in Sepang, the delay in its completion as well as the escalating cost of building KLIA2.
  
  "Why is KLIA building a third runway when they don't use dual mode on two runways. London's Heathrow Airport has 60 million passengers with two runways. Fix the air traffic system, MAHB. That would have been cheaper than building another runway," he said.
  
  "AirAsia wants MAHB to come clean. Terminal (KLIA2) is supposed to be operational by June 2012 and supposed to cost RM2 billion. What's the truth?"
  
  When contacted by SunBiz yesterday, MAHB CEO and managing director Tan Sri Bashir Ahmad Abdul Majid said the airport operator will respond in due course.
  
  Fernandes also hit out at the four MPs who had on Monday criticised him and Khazanah Nasional Bhd CEO and managing director Tan Sri Azman Mokhtar over the recent MAS-AirAsia share-swap deal.
  
  "(The) four MPs have...made it very personal for five years. One MP said I rape poor villagers.
  
  "(But) villagers could never fly before. We have worked so hard to make flying affordable and 130 million people have flown due to us. Why are these members of parliament not questioning the cost of airports and fighting for lower taxes for the rakyat?" he wrote.

Oh my dearest moo moo cow.

What are we, Malaysians, turning ourselves into???

A CEO using a social media network to launch a verbal attack on another corporation?

It now appears irrelevant on who is right and who is wrong but such verbal attack is utterly tasteless and low class. Seriously? That is not the right platform and as a 'leading' Malaysian CEO, Tony should have known better on what and what not to do.

Using Facebook to make a rant?

TSK! TSK! TSK!

That's utterly childish.

On 25th May 2011, I wrote the following: http://whereiszemoola.blogspot.com/2011/05/update-on-airasia-earnings.html

Back in early Aug 2010, I gave AirAsia credit. Yeah I did. LOL!

In the posting Positive Move That AirAsia Defers Their AirBus Order, I said the following...

• However, let me say this, I have to give AirAsia some credit for eating the humble pie and for successfully persuading AirBus to allow them to defer the delivery of the air crafts and more so, this move really gives them a fighting chance to survive and to overcome their insanity of building a company which was clearly over burdened by the immense corporate debts they took upon to finance the building of their business.Yeah.. AirAsia should be ok for the next one year or so... yeah.. this is a POSITIVE CORPORATE exercise... it's certainly extremely crucial that AirAsia made this postponement of delivery.... but... deferring is only a postponement.... and in regardless, these air crafts order still needs to be delivered!

And AirAsia the stock had done fairly well since then. (LOL! That would be some major understatement for some)



(ps: you are welcome! :D )

And I continued to make reference on it.

On 4 Dec 2010: A Look At AirAsia Stellar Earnings. The positive moves from the deferment of the aircrafts was visible on the balance sheet. I made the following remarks.

• The cash/debt level, has it improved?
  The c.c or capital commitment column 'improved'. Would I pay attention to the value? Or should I pay attention to the number of aircraft to be delivered?

On 24 Feb 2011: What Do You Thnk Of AirAsia's Earnings?

From that posting ::

Cash actually improved a lot compared to the previous quarter.
And debt increased slightly.
But the capital commitment... there was a huge improvement, yes?
And as mentioned before in August 2010, I thought it was a Positive Move That AirAsia Defers Their AirBus Order.

Seriously... it's giving AirAsia a fighting chance to survive!!!

And I still hold those remarks from that posting.

• However, let me say this, I have to give AirAsia some credit for eating the humble pie and for successfully persuading AirBus to allow them to defer the delivery of the air crafts and more so, this move really gives them a fighting chance to survive and to overcome their insanity of building a company which was clearly over burdened by the immense corporate debts they took upon to finance the building of their business.
  
  Yeah.. AirAsia should be ok for the next one year or so... yeah.. this is a POSITIVE CORPORATE exercise... it's certainly extremely crucial that AirAsia made this postponement of delivery.... but... deferring is only a postponement.... and in regardless, these air crafts order still needs to be delivered!
• Anyway... a postponement is a postponement is a postponement. Come 2014 (last August AirAsia deferred 8 AirBus to 2014) and 2015, these air crafts still needs to be delivered. Which means, from now till then, AirAsia still needs to ensure that it builds up its cash flow to ensure it can accept delivery of these air crafts that they had ordered. Unless of course, AirAsia can pull off another miracle by asking AirBus to allow them to defer yet once more. :P
  ps: yeah, AirAsia X listing would indeed help AirAsia financials. It too is required. And it is the ONLY OTHER logical and sensible option for AirAsia to rescue its dire balance sheet.

Back in early 2009, I certainly thought AirAsia was doomed. I really thought there was a 90% chance it go into deep trouble but now I have changed my opinion. It's doing all the right things to survive.

They got their placement of shares. They deferred their aricraft order and their current plans to list AirAsia Thailand would help a lot!

But then the main issue or risk is... 2014 and 2015.

That's when AirAsia would have to take deliveries of all the aircrafts orders they have postponed. Will they survive? Or will they not?

ps: I have no idea what the stock would do. :/

---------------------

Last night AirAsia reported its earnings.

I believe the following updated table would speak for itself in regards to the much improvement in AirAsia balance sheet.



ps: And as usual I have no idea and have no interest to know how the stock will do.


------------------------

I repasted the entire posting because  today, AirAsia confirmed its new order of aircrafts:  AirAsia places firm order for 200 A320 Airbus aircraft

200 aircrafts!

Holy cow!

• KUALA LUMPUR: AIRASIA BHD [] placed a firm order with Airbus for 200 A320neo aircraft, which is the largest order for the aircraft manufacturer.
  
  Altogether, AirAsia has now placed firm orders for 375 A320 Family aircraft, with 89 already in service on the carrier's fast-growing pan-Asian network. In addition, the carrier's long haul affiliate AirAsia X is also an all-Airbus customer having placed orders for 38 widebody aircraft.
  
  The order for the 200 aircraft makes AirAsia the biggest airline customer for the Airbus single aisle product line worldwide. Its A320neo aircraft will be powered by CFM International’s new LEAP-X engines.
  
  AirAsia group chief executive officer Tan Sri Tony Fernandes said on Thursday, June 23 with this historic deal, AirAsia had secured its future with the ability to meet the huge growth potential offered by the Asian market.
  
  “Our decision to be one of the launch customers for the A320neo will ensure that we remain at the forefront of our business, with one of the world's youngest and most modern fleets," he said at the Paris Air Show.
  
  The A320neo, which incorporated new engines and large wing tip devices called sharklets, will ensure fuel savings of 15% and additional range capability of 500 nautical miles (950 km), or the ability to carry two tonnes more payload at a given range.
  
  The fuel savings translate into some 3,600 tonnes less tonnes carbon dioxide per aircraft per year. In addition, the A320neo will provide a double-digit reduction in NOx emissions and reduced engine noise. The A320neo will have over 95% airframe commonality with the existing models, enabling it to fit seamlessly into existing A320 Family fleets.
  
  Over 7,000 A320 Family aircraft have already been ordered and almost 5,000 delivered to more than 330 customers and operators worldwide.

No price mentioned???

So I searched Bursa website: Purchase of Airbus A320 Neo.pdf

• AirAsia Berhad (“AirAsia” or “the Company”) is pleased to announce that it has signed a Purchase Agreement with Airbus S.A.S (“Airbus”) to purchase two hundred (200) Airbus A320 NEO aircraft (“A320 NEO Aircraft”).
  
  With the purchase of the A320 NEO Aircraft, the aggregate total of AirAsia’s aircraft order for the AirAsia Group including the current A320 aircraft will be three hundred and seventy five (375) aircraft orders comprising one hundred and seventy five (175) firm orders of the current A320 aircraft and two hundred (200) firm orders of the A320 NEO Aircraft.

Let's refer to the table from May's posting again.



Yes, cash is improving but the most worrying thing for me is the C.C or Capital commitment. As per the most recent earnings report, fy 11 A1, AirAsia said its total capital commitment for new aircrafts totals some 19.635 billion ringgit.

Today's order:?

• The value of the A320 NEO Aircraft Purchase based on list price is approximately US$18.2 billion for 200 aircraft.

US$18.2 billion!??

WOW!

Using a lower and simple exchange rate of 3.00 to the USD, this would work to about an aircraft order worth 54.6 Billion ringgit!

Which means AirAsia capital commitment would now be 74.235 billion ringgit!!!!

WOW!

This is massive. As mentioned before and highlighted again in the top of this posting, I was worried about AirAsia financial position back in 2009. However, because AirAsia had deferred its new aircrafts deliveries, AirAsia financials turned for the much better. Cash flow improved. And with the possible listing of its subsidiaries, AirAsia looked ok. But today's announcement is scary. It's a massive worry. How on  earth is AirAsia going to be able to finance this?

Ok, the new the aircraft delivery schedule is to commence from 2016 through 2026, and when we add in the current existing order with this new order, from now till 2026, AirAsia will be taking in delivery of 285 new aircrafts!

How?

AirAsia still can ah?

------------------------

From AirAsia announcement today, the delivery schedule.

( first line would read, aircrafts no.90 to 96 or 7 new aircrafts will be delivered this year. This is part of the current A230 Airbus order.)

Aircraft N° 90 - 96 7 2011 Current A320


Aircraft N° 97 – 110 14 2012 Current A320

Aircraft N° 111 – 123 13 2013 Current A320

Aircraft N° 124 – 141 18 2014 Current A320

Aircraft N° 142 – 160 19 2015 Current A320

Aircraft N° 161 - 175 15 2016 Current A320

Aircraft N° 176 – 179 4 2016 A320 NEO Aircraft


Aircraft N° 180 – 193 14 2017 A320 NEO Aircraft

Aircraft N° 194 – 211 18 2018 A320 NEO Aircraft

Aircraft N° 212 – 230 19 2019 A320 NEO Aircraft

Aircraft N° 231 – 250 20 2020 A320 NEO Aircraft

Aircraft N° 251 – 271 21 2021 A320 NEO Aircraft

Aircraft N° 272 – 294 23 2022 A320 NEO Aircraft

Aircraft N° 295 – 318 24 2023 A320 NEO Aircraft

Aircraft N° 319 – 342 24 2024 A320 NEO Aircraft

Aircraft N° 343 – 366 24 2025 A320 NEO Aircraft

Aircraft N° 367 – 375 9 2026 A320 NEO Aircraft

Back in early Aug 2010, I gave AirAsia credit. Yeah I did. LOL!

In the posting Positive Move That AirAsia Defers Their AirBus Order, I said the following...

• However, let me say this, I have to give AirAsia some credit for eating the humble pie and for successfully persuading AirBus to allow them to defer the delivery of the air crafts and more so, this move really gives them a fighting chance to survive and to overcome their insanity of building a company which was clearly over burdened by the immense corporate debts they took upon to finance the building of their business.
  
  Yeah.. AirAsia should be ok for the next one year or so... yeah.. this is a POSITIVE CORPORATE exercise... it's certainly extremely crucial that AirAsia made this postponement of delivery.... but... deferring is only a postponement.... and in regardless, these air crafts order still needs to be delivered!
  

And AirAsia the stock had done fairly well since then. (LOL! That would be some major understatement for some)



(ps: you are welcome! :D )

And I continued to make reference on it.

On 4 Dec 2010: A Look At AirAsia Stellar Earnings. The positive moves from the deferment of the aircrafts was visible on the balance sheet. I made the following remarks.

• The cash/debt level, has it improved?
  The c.c or capital commitment column 'improved'. Would I pay attention to the value? Or should I pay attention to the number of aircraft to be delivered?
  

On 24 Feb 2011: What Do You Thnk Of AirAsia's Earnings?

From that posting ::

Cash actually improved a lot compared to the previous quarter.
And debt increased slightly.
But the capital commitment... there was a huge improvement, yes?
And as mentioned before in August 2010, I thought it was a Positive Move That AirAsia Defers Their AirBus Order.

Seriously... it's giving AirAsia a fighting chance to survive!!!

And I still hold those remarks from that posting.

• However, let me say this, I have to give AirAsia some credit for eating the humble pie and for successfully persuading AirBus to allow them to defer the delivery of the air crafts and more so, this move really gives them a fighting chance to survive and to overcome their insanity of building a company which was clearly over burdened by the immense corporate debts they took upon to finance the building of their business.
  
  Yeah.. AirAsia should be ok for the next one year or so... yeah.. this is a POSITIVE CORPORATE exercise... it's certainly extremely crucial that AirAsia made this postponement of delivery.... but... deferring is only a postponement.... and in regardless, these air crafts order still needs to be delivered!


• Anyway... a postponement is a postponement is a postponement. Come 2014 (last August AirAsia deferred 8 AirBus to 2014) and 2015, these air crafts still needs to be delivered. Which means, from now till then, AirAsia still needs to ensure that it builds up its cash flow to ensure it can accept delivery of these air crafts that they had ordered. Unless of course, AirAsia can pull off another miracle by asking AirBus to allow them to defer yet once more. :P
  ps: yeah, AirAsia X listing would indeed help AirAsia financials. It too is required. And it is the ONLY OTHER logical and sensible option for AirAsia to rescue its dire balance sheet.

Back in early 2009, I certainly thought AirAsia was doomed. I really thought there was a 90% chance it go into deep trouble but now I have changed my opinion. It's doing all the right things to survive.

They got their placement of shares. They deferred their aricraft order and their current plans to list AirAsia Thailand would help a lot!

But then the main issue or risk is... 2014 and 2015.

That's when AirAsia would have to take deliveries of all the aircrafts orders they have postponed. Will they survive? Or will they not?

ps: I have no idea what the stock would do. :/

<<<<<>>>>>

Last night AirAsia reported its earnings.

I believe the following updated table would speak for itself in regards to the much improvement in AirAsia balance sheet.



ps: And as usual I have no idea and have no interest to know how the stock will do.

Let me try something new.

I have blogged too many times on AirAsia's earnings. ( Refer postings here: AirAsia )

AirAsia reported its earnings tonight.

How now Brown Cow?

What do you think? Do you like what you see?

( haha.. this something new... a rather lazy new way, eh? :P )

---------------------

• bullbear said...
  I like your posts when YOU provide the answers. I absolutely rank this post your worst so far. :-) Cheers. ;-)

Alamak! Worst post ever?

Are you sure?

Hehe... guess what? I do agree! :P (ps: I have no answers on how the moo moo cow jumped over the moon! )

• K C said...
  “Never invest in anything that eats or needs painting.” Billy Rose
  
  AirAsia made an EPS of 38 sen and with its share at 2.35, it is selling at a PER of only 6. It has 1.5 b in cash. Great?
  
  No it sucks to the bone! It borrows 7.86 b! this leaves it with negative cash of 6.36 b! Are they required to pay the 720m deferred tax which is classified as an asset too? Cash flows from operations of 1.9b but how much has to plough back for capex? It has been negative free cash flow in terms of billions for the past years. Scary, isn't that? That is the peril of just looking at earnings.

Errr.... extremely valid points but....

I am not too motivated to talk about eps and per. Sorry.

However, as most would know, I am not a fan of AirAsia but.... sometimes I do have to give credit when credit was due.

Let's see, when AirAsia was listed, I did not like how they marketed their stock. It was all talk and most important issue to the investing public was 'did AirAsia live up to their IPO proforma promises?' My answer is a flat no.

The company made extremely optimistic forecasts during their IPO. They boldly told the investing public that it would triple its earnings within a year after listing and needless to say, some would argue that by having such optimistic earnings forecasts, the company would able to market their shares much higher. And AirAsia failed to deliver what it had promised during its IPO. ( Do refer to this old posting AirAsia. )

And then it made losses when they gambled with their hedging. Yes, I understand by using the word gamble, it's a rather big word but one can refer to this 2009 posting Regarding AirAsia Fuel Hedges Again where AirAsia mentioned in the local media 'No more bets on oil price'.

Yeah.

I was less than impressed.

And neither was I impressed with their bold buyout saga back in 2008. ( see Huh? AirAsia Buyout Still An Option????? - it failed because Tune Air Says Unable To Secure Financing !!! )

Anyway ... the extreme weakness in AirAsia balance sheet was well documented many times. So was the deferred tax issue and how AirAsia declared it to be an asset but what do I know since I am not an accountant and I never studied it before. :)

It was scary the size of AirAsia debts and the size of the capital commitment for new aircrafts. How on earth did AirAsia manage to make such a gutsy order for new aircrafts given the weakness in their balance sheet? It was unreal.

Things however did change.

Should one call it great business hindsight? Or should one call it pure luck?

First they managed to get the big boost when they managed to do a share sale and from that placement of shares, they managed to raise some 500 million in 2009. That was crucial in my flawed opinion.

And then... the USD weakened and the oil prices fell.

It was a double booster.

Their borrowings was predominantly denominated in USD. With the weaker USD, it meant they now owed less in RM and I do understand that some would say it's a silly reasoning because AirAsia still needs to pay it and who knows by the time they actually pay, the USD could rise. However, as it is, what matters to the financial markets is that at the moment, AirAsia now owes less.

Anyway my previous posting on AirAsia was A Look At AirAsia Stellar Earnings. In that posting I had updated AirAsia main financial numbers.

Compare that to yesterday earnings.

Earnings was actually flat. The previous year same quarter comparison is NOT meaningful in my opinion.

Cash actually improved a lot compared to the previous quarter.

And debt increased slightly.

But the capital commitment... there was a huge improvement, yes?

And as mentioned before in August 2010, I thought it was a Positive Move That AirAsia Defers Their AirBus Order.

Seriously... it's giving AirAsia a fighting chance to survive!!!

And I still hold those remarks from that posting.

• However, let me say this, I have to give AirAsia some credit for eating the humble pie and for successfully persuading AirBus to allow them to defer the delivery of the air crafts and more so, this move really gives them a fighting chance to survive and to overcome their insanity of building a company which was clearly over burdened by the immense corporate debts they took upon to finance the building of their business.
  
  Yeah.. AirAsia should be ok for the next one year or so... yeah.. this is a POSITIVE CORPORATE exercise... it's certainly extremely crucial that AirAsia made this postponement of delivery.... but... deferring is only a postponement.... and in regardless, these air crafts order still needs to be delivered!
• Anyway... a postponement is a postponement is a postponement. Come 2014 (last August AirAsia deferred 8 AirBus to 2014) and 2015, these air crafts still needs to be delivered. Which means, from now till then, AirAsia still needs to ensure that it builds up its cash flow to ensure it can accept delivery of these air crafts that they had ordered. Unless of course, AirAsia can pull off another miracle by asking AirBus to allow them to defer yet once more. :P
  ps: yeah, AirAsia X listing would indeed help AirAsia financials. It too is required. And it is the ONLY OTHER logical and sensible option for AirAsia to rescue its dire balance sheet.

Back in early 2009, I certainly thought AirAsia was doomed. I really thought there was a 90% chance it go into deep trouble but now I have changed my opinion. It's doing all the right things to survive.

They got their placement of shares. They deferred their aricraft order and their current plans to list AirAsia Thailand would help a lot!

But then the main issue or risk is... 2014 and 2015.

That's when AirAsia would have to take deliveries of all the aircrafts orders they have postponed. Will they survive? Or will they not?

ps: I have no idea what the stock would do. :/

• tklaw said...
  Hi Moolah,
  
  Most investors would ignore dividend or debt level during bull runs.
  
  What they care is profit level...Capex? too far to think of it. Making good profit will boost share price. short term profit is more important..haha

Hope you understand that this is NOT a posting suggesting AirAsia would go up or down.

You do undertstand that, don't you?

Quote: "Most investors would ignore dividend or debt level during bull runs." ..... err... most investors? I am sure some investors would strongly disagree about such a statement.

But what do I know? :=)

Back in early Aug 2010, I gave AirAsia credit. Yeah I did. LOL!

In the posting Positive Move That AirAsia Defers Their AirBus Order, I said the following...

• However, let me say this, I have to give AirAsia some credit for eating the humble pie and for successfully persuading AirBus to allow them to defer the delivery of the air crafts and more so, this move really gives them a fighting chance to survive and to overcome their insanity of building a company which was clearly over burdened by the immense corporate debts they took upon to finance the building of their business.
  
  Yeah.. AirAsia should be ok for the next one year or so... yeah.. this is a POSITIVE CORPORATE exercise... it's certainly extremely crucial that AirAsia made this postponement of delivery.... but... deferring is only a postponement.... and in regardless, these air crafts order still needs to be delivered!
  

And AirAsia the stock had done fairly well since then. (LOL! That would be some major understatement for some)

Air Asia announced its earnings last week.

Was it good?

Everyone thought it was fantastic.

But... but... was it really spectacular for me?

Now since Air Asia had 'borrowed' or perhaps the more elegant word to use is 'financed' its success via massive borrowings, I for one, thinks that it's rather crucial to pay attention to its balance sheet and observe the cash/debts level. And also, since Air Asia had committed itself to a massive aircraft order, observing the capital commitment level is just as crucial.

( * for the record: AirAsia became the world's biggest customer for the Airbus A320-200 after placing an order for 175 aircraft in December 2007, with an option for 50 more. *)

Mentioned in that Aug posting...

• Anyway... a postponement is a postponement is a postponement. Come 2014 (last August AirAsia deferred 8 AirBus to 2014) and 2015, these air crafts still needs to be delivered. Which means, from now till then, AirAsia still needs to ensure that it builds up its cash flow to ensure it can accept delivery of these air crafts that they had ordered. Unless of course, AirAsia can pull off another miracle by asking AirBus to allow them to defer yet once more. :P
  ps: yeah, AirAsia X listing would indeed help AirAsia financials. It too is required. And it is the ONLY OTHER logical and sensible option for AirAsia to rescue its dire balance sheet

Here's AirAsia updated numbers.. (the format of the table would be the same as in the posting Just How Profitable Is AirAsia Since Listing? )

* fy 2007 numbers is a mess because AirAsia changed its financial year end *

Now I may be wrong but I would NOT discount the following from AirAsia earnings. Yes, the earnings table above includes all of these...

1. Forex translation gains
2. Derivative gains/losses in oil hedges
3. deferred tax benefit granted to AirAsia
4. I am lazy! :P

( the forex translation gains is a lot for this quarter, yes? )

So AirAsia 'total earnings' for fy 2010 Q3 stood at some 327.286 million. How impressive is that?

The cash/debt level, has it improved?

The c.c or capital commitment column 'improved'. Would I pay attention to the value? Or should I pay attention to the number of aircraft to be delivered?

To put this capital commitment into simple perspective, on June 2010, from the posting How Good Is AirAsia's Latest Earnings?

• So far, AirAsia has received 70 of its A320 aircraft on order, with another 105 aircraft to be delivered through to 2015. ( Read more: AirAsia seeks to slow down A320 deliveries )

But some would compare current Q3 cash/debts versus end FY 2009 numbers. Yes, some would compare the current balance sheet versus what AirAsia had end of last fiscal year and when one makes such comparison, AirAsia balance sheet certainly had improved, yes?

But.... then.... one should also take into consideration that AirAsia raised some 509.217 million from its share placement sale done end FY 2009.

And then the Amount Owed By AirAsia Subsidiaries! issue.

The current Q3 earnings notes showed that there is certainly much improvement in this area. Yeah, its subsidiaries is paying back the money owed...

The financial (cost)/income table is certainly interesting eh? ( see page 25 of AirAsia's earnings notes)