Friday 02 Jun 2023
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KUALA LUMPUR (Nov 21): Long-haul budget airline AirAsia X Bhd (AAX) rose in heavy trade on its chief's assurance that the loss-making airline can turnaround in its next financial year ending December 31, 2015 (FY15)

AirAsia Bhd CEO Tan Sri Tony Fernandes also assured investors that he did not rule out the possibility of AAX returning to profitability in 4QFY14.

At 12.07am, AAX rose two sen or 3% to 63.5 sen with some 18 million shares exchanged. The counter had earlier risen to an intraday high at 64 sen.
For 3QFY14, the company posted a wider net loss of RM210.85 million
from RM128.79 million in 2QFY14. The latest net loss  was AAX's fourth consecutive quarterly loss since 4QFY13.

In a note today, CIMB Investment Bank Bhd said it had upgraded its rating for AAX shares to “hold” from “reduce”. CIMB also revised upward its target price for the stock to 78 sen from 72 sen.

CIMB said “the worst is over for AAX”.

The research house said the future is bright for AAX  based on its revamp plans, which included addressing overcapacity issue.

“We are upgrading our call from a ‘reduce’ to a ‘hold’ in view of the sharp drop in AAX’s share price yesterday, as well as our sense that AAX is doing a lot to mitigate the downside risks to earnings. The lower fuel prices also contribute to a very positive earnings momentum,” said CIMB.

Lower oil prices have prompted CIMB's expectation that AAX would reduce its FY15 loss materially, and turn a profit in FY16.

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