AirAsia: Not appreciated
and undervalued — June 2018

AirAsia is not appreciated, as least on the Kuala Lumpur stock exchange where its share value has fallen by a third over the past two months, and that from a level which Tony Fernandes, founder and CEO of Asia’s leading LCC, regarded as substantially undervaluing his airline.

Unaudited accounts for 2017 indicate that the AirAsia Group achieved a net operating margin of 16.3%, in the upper range of LCC expectations, and grew net profits to $394m, up by 38% on 2016. First quarter results for 2018 are guided as being strong. It has gone through some troubled times, notably in 2014 when a combination of adverse events — a “perfect storm” — pushed it into losses, the airline group has grown rapidly, by about 13% pa on average in seat capacity terms since 2010. (All these figures refer to AirAsia Berhad, excluding the long-haul AirAsiaX and its associates.)