KUALA LUMPUR: AirAsia Bhd’s (AirAsia) share price increased after the group announced the introduction of additional frequencies to six domestic destinations and one international route.
At closing yesterday, the budget carrier’s share gained five sen to RM2.98 per share after fluctuating between RM2.93 per share and RM2.99 per share, with 13.43 million shares traded.
The group announced that the additional frequencies were from the Kuala Lumpur hub to Bangkok, Kota Kinabalu, Sibu, Kuching and Johor Baharu, while the Johor Baharu hub would see additional frequencies to Kuching, Sibu, Miri and Penang.
There would also be added frequencies from Penang to Kota Kinabalu and Kuching as well as from Kota Kinabalu to Kuching.
Hong Leong Investment Bank (HLIB), in a research note, said it expected Airasia to remain bullish on its expansion plan, with confirmed additional 100 A320s (plus options of 50 A320s and 50 A321s).
It said AirAsia Group chief executive officer Tan Sri Tony Fernandes remained confident in the strong growth in the Asia-Pacific region as he continued to explore opportunities in other countries in the region.
“Unit cost control is the utmost important factor in surviving the aviation industry and AirAsia’s cost advantages, combined with its strong brand name and huge network, will ensure its continuous success,” it said.
The largest low-cost airline in Asia made the announcement on December 13 that the group had placed a new order with Airbus for 100 more A320 Family aircraft.
However, HLIB Research was cutting earnings for financial year 2013-2014 by eight per cent to 12 per cent after accounting for lower yields due to the entry of Malindo Airways enforcing price competition.
“We expect jet fuel price to remain high, which will affect AirAsia’s group margin,” it said.
It also maintained ‘hold’ on AirAsia, with a higher target price of RM3.20 per share from RM3.14 per share previously. — Bernama