AirAsia Aircraft at Kuala Lumpur Airport Ahead of Earnings

Photographer: Samsul Said/Bloomberg

AirAsia X Bhd.’s restructuring plan was met with bleak forecasts and ratings from analysts as well as a 10% drop in its share price, underscoring the daunting challenges that lie ahead for the grounded carrier.

Public Investment Bank Bhd. maintained its underperform rating and 1 sen price target on the airline, the long-haul arm of AirAsia Group Bhd. Max Koh, an analyst at KAF Equities Sdn Bhd., kept his sell rating and 0.02 sen target, saying he was neutral on the restructuring proposals “given the grim outlook.” AirAsia X’s shares headed for their biggest loss since Aug. 3.

AirAsia, AirAsia X underperforming a gauge of Asia-Pacific airline stocks

The airline said Tuesday the plan, which it expects to complete by the end of next quarter, would wipe out almost 63.5 billion ringgit ($15.3 billion) in debt and save it from collapse as the coronavirus pandemic continues to wreak havoc on travel. The proposal requires approval from investors and creditors. Advance ticket payments will be converted into travel credits for customers.

AirAsia X said it hopes to begin operating with two aircraft in selected markets in the first quarter next year and gradually resume flights to all destinations by the end of 2021. The carrier said it would focus on flights within the five- to six-hour range and defer investment in new or immature routes.

Here’s what some analysts said about AirAsia X’s restructuring plan:

KAF’s Koh (Sell; target 0.02 sen)

  • This is a “hard reset” for AirAsia X to remain a going concern
  • Neutral on plans to operate with a leaner and lower cost structure and 500-million ringgit fundraising exercise as the airline will need approvals from creditors and shareholders to succeed
  • The aviation industry’s outlook is grim due to the Covid-19 pandemic
  • Fresh equity injection from shareholders should accompany AirAsia X

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SYDNEY (Reuters) – A measure of Australian business conditions rose in September to levels not seen since the coronavirus pandemic forced a nationwide lockdown, though overall levels were still the below long-run average, survey results showed on Monday.



a group of people walking down the street: Shoppers walk along a street in the central business district of Sydney


© Reuters/DAVID GRAY
Shoppers walk along a street in the central business district of Sydney


National Australia Bank’s index of business conditions rose 6 points to 0 from -6 in August.

The index has come a long way since hitting a trough of -34 in April at the height of the pandemic though it is still nowhere close to the long-run average of +6.

The survey’s measure of business confidence picked up too, but stayed in negative territory, climbing to -4 from -8 in August.

The improvement in conditions was driven by a rise in all three sub-components with trading and profitability in positive territory, likely reflecting improving activity as the economy opens up.

The employment index stayed negative, suggesting businesses were not yet ready to add new positions.

Forward orders rose to -7 while capacity utilisation edged up to 76.9%. This, in addition to still negative confidence, has seen capex stay in negative territory, NAB noted.

(Reporting by Swati Pandey; Editing by Sam Holmes)

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