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You scare what? Every industry got companies making losses one what. But what matter is you can make profit or not. The fact that India Airline is making losses is a good news instead. Your competitor who has long been protected by its GOV has no competitive advantage.
hlfoo2010 ( Date: 25-Oct-2013 14:56) Posted:
Sinking india airline ???
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Sinking india airline ???
thanks gavini
12
Nov after trading hours.
sun233 ( Date: 24-Oct-2013 10:20) Posted:
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http://economictimes.indiatimes.com/news/news-by-industry/transportation/airlines-/-aviation/tata-sia-airline-venture-likely-to-get-fipb-nod-on-thursday/articleshow/24619920.cms
Enough said. At this point anything can happen. Knee jerk reaction at most. Only dividend will save the day. Rosesyrup.....agree with you.....will reap rewards later next year but for now hopefully they increase dividend. Can't understand wh they have not considering they bought back shares. Earnings announcement awaited. Is it on 1Nov or 12 Nov? anyone knows.
India's Jet Airways posts sharp loss, hit by slowdown
AFP News ? 10 minutes ago
Maybank-KE has results preview. The house expect SIA?s Cargo unit to drag group further into the red. Expect SIA to report core operating loss of $41m for 2QFY3/14F (2QFY3/13: +SGD70m 1QFY3/14:+SGD82m) when it releases its results on 12 Nov 2013. Across the core business units, expect breakeven load factors to head north sequentially on higher jet fuel prices and downward pressure on yields. Overall, group earnings would have to be supported by its associates and the joint ventures of SIAEC. Overall, the house reiterates its HOLD call on SIA with target price trimmed to $10.20. Prefer exposure to SIAEC (BUY, TP: $6.19), its profitable engineering arm.
Buy. Don't be afraid!
SIA suffered a slower month across its three major business units with SQ passenger traffic slowing, partially due to festive season dates, but also highlighting the need to maintain high promotional activity to prop up the load factors. At Silkair the growth exhibited over the past 2 years has slowed materially and demand now needs to grow into the additional capacity with no passenger growth in September. CLSA believe cargo has removed substantial costs along with freighter capacity, but demand is still falling faster. While capacity growth is slowing not all competitors are doing so and thus competition is brisk and ROE low. With passenger demand being driven by greater discounting, this creates risk to yield assumptions even as SQ looks to introduce higher fees for peak day services. The continuing low PBx valuation reflects both short term ROE, but also concern over the structural rather than just cyclicality SIA faces. CLSA maintains UNDERPERFORM with TP $10.28.
http://sg.news.yahoo.com/tony-fernandes-admits-airasia-screw-ups-japan-europe-072031055.html
Tony Fernandes admits AirAsia screw-ups in Japan, Europe, says London still a target
The Malaysian Insider ? Sat, Oct 12, 2013AirAsia founder Tony Fernandes (pic) admits that the low-cost carrier failed in its ventures in Japan and Europe.
?Japan was a disaster. Our partner didn?t understand what we wanted,? said Fernandes at the Global Entrepreneurship Summit 2013 in Kuala Lumpur today.
AirAsia parted ways with Japan?s All Nippon Airways (ANA) when it sold its 49% stake in AirAsia Japan to ANA in June this year.
Both airlines had clashed over management and operational differences followed by losses amounting to ¥3.5 billion (RM113 million).
Fernandes, 49, has publicly said that he wants AirAsia to re-enter the Japanese market and is on the lookout for financial partners.
?We?ve just got to look for the right one this time because we screwed up the last time,? he added.
He also spoke on the airline?s failed routes in Europe, citing multiple factors for the axing of the carrier?s European routes in March 2012.
?We pulled out of London because we had the wrong aircraft, the A340. The price of oil was US$80 (RM254) at the time. Then it went up to US$130 (RM413). With a four-engine aircraft, it was just not feasible,? Fernandes said, adding that the UK government's green tax is " discriminatory against ultra-long-haul airlines" .
But Fernandes is keen to revive AirAsia?s previously axed routes, specifically to London.
?We've got to be in Europe. There?s a huge demand for London,? he said.
He said in June this year that the company was looking into commencing its flights to Europe once it receives its Airbus A350 aircraft, which are expected to be delivered beyond 2017 ? a timeline that Fernandes says may be too late for the carrier to re-enter the European market.
?We may change the seating configuration and have business class, but we do have to fly to London,? he added.
He also rubbished rumours that low-cost carrier Malindo Air poses a threat to AirAsia, saying: ?I have zero interest in Malindo? our competition is ourselves.?
Malindo is a new joint-venture between Lion Air, Indonesia?s low-cost carrier, and Malaysia?s National Aerospace and Defence Industries (NADI). The airline started operating in March this year. - October 12, 2013.
MY previous TP of $9.60 was breached just 1 month after I posted it here. (you can verify by scrolling through the posting history on SIA forum.)
Reiterate current TP: $11.20. Pay less attention to the negative news in the industry. India present a big opportunity plus TATA the white knight. SIA is SAVED for sure. Nevertheless, it still take some times for SIA to reap the intangible benefit by working with TATA.
CLSA's channel checks suggests that the air transport market should remain tough, after confirmation on a lack of rebound in corporate demand. Further, the corporate travel budgets and policies which tightened in 4Q 2011 have not loosened whilst class downgrades are still occurring. SIA's forward capacity growth of 3% y/y matches the forward booking numbers. Asian Air cargo volume continues to lag global trade, failing to bounce off the bottom, despite more positive numbers from IATA globally, where the M.E, Latam and Europe grew at faster rates. Global trade has grown at 3.5% 3-year CAGR in volume terms whilst Asian Airfreight has shrunk by 3.9%. However with the US Government shutdown, there is some risk of customs clearance of goods at ports being delayed. This could be the catalyst required to disrupt supply chains and stimulate air cargo demand whilst inventory levels are low. SIA?s issues are factored into its valuations, at a forward 0.89 P/B valuation compared to the 2-year average of 0.95x and a trough 0.86x. However, given there has been no demand shock, there seems to be bigger structural issues at play.
Deutsche updates that the recently proposed Indian JV with Tata Sons to set up a full service airline based in New Delhi is promising, but short term earnings challenges remain. Downward passenger yield pressures remain and SIA has not seen any significant pickup in the cargo business. Deutsche thinks it makes sense for SIA to try to expand into that market given longer term growth potential of the main SIA carrier is only 4 ? 6% p.a. However, the house cautions on regulatory approval which may take months, and fuel taxes and airport bottlenecks which is the norm for the Indian market. Maintains Sell with TP: $8.80
DONT UNDERESTIMATE THE POWER OF TATA!
I would like to up my TP for SIA to $11.20. TATA is a firm governed by one of world best management team! By working with TATA, SIA has alot of learning opportunity and learning can be transferred and applied to parent company.
Don't blink your eyes, you will be awed by how much intangible benefits TATA gives to SIA.
CIMB maintains Neutral with $10.50 TP, following SIA?s latest JV with Tata Sons. House believe that this is a positive step for SIA, although any benefits are unlikely to accrue until the new airline has been established. No timeline has been set for this yet. While SIA has sufficient cash to invest in its latest venture, this development reinforces view that gains on the sale of its Virgin Atlantic stake will not be fully distributed to investors.
CIMB maintains Neutral with $10.50 TP. House notes that SIA?s mainline load factors were helped by strong leisure travel and a shift in the Hari Raya period. On the other hand, SilkAir?s constant capacity addition is forcing loads lower, while cargo traffic also continues to see little improvement. SIA notes that passenger yields are likely to remain under pressure due to promotional efforts to boost loads. Apart from discounting, house believe that the persistent strength of the S$ against other operating currencies is also contributing to weak pricing and believe cargo weakness will continue to be a drag on SIA.
DBS upgrade to Buy from Hold with $11.40 TP. HOuse note that although outlook is muted, valuation is now attractive at -1.3SD at 0.88x P/BV. Note that there are several possibilities to unlock its net cash of over S$4.9bn, representing > 40% of market cap Potential to return excess net cash to shareholders, which has reach $4.20 per share. Add that SIA?s share price has recently broken below -1SD (0.92x P/BV) in August to its current level of 0.87x P/BV, or -1.3SD. This is a level seen previously only in crises such as 9/11, SARS, and the GFC. Also, at this current price, the rest of SIA is valued at less than $3 per share if we were to strip to out its net cash and stake in SIA Engineering.
this one is sinking ship. there are other boats that we can jump to
Jet fuel is already at 125 and might even shoot up 50% more in a full scale middle east war. That will wipe out 50m of thin profits and add another few hundred m of losses considering the corresponding revenue drop and cost increases.
On hindsight, the decision not to confront LCC 5+ years ago is a strategic error during the leadership transition.It allows airasia to grow its roots and explode from the large domestic demand in malaysia .The worst is yet to come, airasia will soon realise its full potential and become a force to be reckon with once they get their hands around loss making MAS which will then allow them to challenge Singapore hub status which the middle eastern airlines with oil subsidies advantage is already chewing at hard.
Now with Sia and airasia both booking so many planes before 2018 , it will also possibly lead to a oversupply situation of planes and a price war much like current shipping industry is suffering at . This will be a tough dog fight and the only sure victors in such situation seems to be passengers and not shareholders . Just like in Usa , history is repeating in asia.
