PETALING JAYA – PublicInvest Research expects AirAsia X Bhd (AAX) to be the most affected by the new passenger service charge (PSC) tier for travel to Asean countries effective Jan 1 next year, announced by the Malaysian Aviation Commission (Mavcom) on Monday.
In a research report yesterday, its analyst Nur Farah Syifaa’ Mohamad Fu’ad said this is because AAX routes were mainly for the Australian and North Asian regions, where the PSC rate hike for international excluding Asean would increase by 56% to RM50, from RM32 currently.
However, Nur Farah said the rate hike would not directly impact AAX earnings, as the PSC is borne by the consumers.
“Nevertheless, we remain cautious on slower consumer spending and travel demand from Malaysia, which might give some pressures towards its passenger growth going forward.”
“Pending more details from the management and its earnings announcement for Q3FY16, we maintain our earnings forecast,” she noted.
On a separate note, Nur Farah said the research house expects AirAsia Bhd to be less affected as the routes flown are spread within the domestic and Asean regions.
The rate for domestic flights would rise from RM6 to RM11 for domestic, while Asean flights would increase by 9.4% to RM35, from RM32 previously, Nur Farah said.
“Pending more details from the management and detailed results for Q3FY16, we maintain our earnings forecast for now.”
Meanwhile, she said the airline’s operating statistics for the third quarter 2016 (Q3FY16) was within the research house expectations, where Malaysia AirAsia achieved a load factor of 89.3%, up 2.5 percentage points, compared with the previous quarter of 86.8%.
PublicInvest maintained its “neutral” call on AirAsia with a target price of RM2.50, pegged on 8 times FY17F earnings per share, based on enlarged share capital, including the proposed share placement to Tune Live Sdn Bhd.