AirAsia Group (former AirAsia X)

[winston]

not vested

5238 AAX (BUY)
Key focus on sustaining operations

AAX reported a weak start to 1QFY26, with core PATMI at RM62.6m (after consolidating Capital A Aviation).

Earnings were significantly impacted by:
(i) a decline in ancillary income (c.RM100m);
(ii) higher marketing expenses (c.RM100m); and
(iii) an increase in jet fuel costs c.RM200m.

Nevertheless, air travel demand across the Asia Pacific region remains resilient.

AAX continues to actively manage ticket pricing (including fuel surcharges), as well as fleet capacity to mitigate the impact of elevated jet fuel cost.

We maintain our BUY recommendation, albeit with a lower TP of RM2.20 (from RM3.35), based on 10x FY27 earnings.

At the current share price of RM1.22, valuations remain attractive.

We do not expect the war to be a prolonged one and believe AAX is capable of avoiding a PN17 classification.

Source: HLIB

[winston]

not vested

5238 AAX (BUY)
Time to spread its wings again

The peace agreement between the US and Iran marks a significant breakthrough to the end of the conflict and reopen the Strait of Hormuz, easing concerns over energy supply disruptions.

Jet fuel prices have trended down to USD120/bbl from a peak of USD220/bbl.

We expect AAX to recover strongly post 2QFY26, particularly towards the seasonally stronger 4QFY26, driven by strong travel demand, normalisation of jet fuel prices to USD100/bbl and USD weakening .

We reiterate our BUY recommendation on AAX with an unchanged TP: RM2.20, based on 10x FY27 EPS.

We believe the sharp share price correction (from RM2.25 pre-Iran war) presents an attractive accumulation opportunity for investors.

Source: HLIB

[winston]

not vested

Jun 23, 2026

Coming out of turbulence to calmer skies

Maintain BUY call and MYR1.81 TP

We attended AAX’s outlook briefing.

AAX is normalising fares and capacity as jet fuel falls from USD233/bbl to USD112/bbl after the United States Iran ceasefire.

Positively, AAX will hedge jet fuel prices going forward.

Curiously, AAX believes FY26E will still be a profitable year notwithstanding a difficult 2Q26.

We maintain our more conservative earnings estimates and MYR1.81 TP based on 7x FY27E P/E (global lowcost carrier average CY27E PER).

Source: Maybank

https://mkefactsettd.maybank-ke.com/PDFS/542231.pdf

[winston]

vested

AirAsia Group posts RM527m net loss in 2Q on higher fuel costs, forex drag

By Justin Cheng

The aviation group recorded a net loss of RM527.16 million for the quarter ended June 30, 2026 (2QFY2026), widening from RM154.9 million in the preceding quarter.

The group said the quarter's losses were primarily driven by a 58% year-on-year surge in fuel expenses as average jet fuel prices spiked to US$183 (RM747.92) per barrel.

Excluding a net foreign exchange loss of RM330.97 million stemming from the depreciation of local currencies which includes the ringgit, Thai baht, Indonesian rupiah and Philippine peso against the US dollar, the group's net loss would have stood at RM499.6 million.

AirAsia Group said it has since suspended underperforming long-haul routes, delayed the launch of its proposed hub in Bahrain, and restructured its Philippine and Indonesian operations by reducing fleet allocations to focus on higher-yielding domestic and core Asean routes.

For the third quarter — historically the softest period for regional travel— AirAsia plans to cut seat capacity by 20% to 25% year-on-year, before restoring capacity in the fourth quarter for the year-end travel season.

The group also plans to return 25 older aircraft to lessors within FY2026 to reduce lease costs, while new Airbus A220 and A321XLR aircraft are scheduled for delivery from 2028.

Source: theedgemalaysia.com

https://theedgemalaysia.com/node/814453

[winston]

not vested

5238 AAGB (BUY)
Improving coming quarters

AAX reported LATMI of RM167.0m in 2QFY26 and RM104.4m in 1HFY26, mainly impacted by higher jet fuel costs following the Iran conflict.

Management guided for a better 3QFY26, supported by higher yields and a better cost structure, with further upside during the seasonally stronger 4QFY26.

We maintain our BUY call, albeit with a more conservative TP of RM1.86 (from RM2.20), based on 10x mid-FY27 earnings.

We believe the market and air travel demand has gradually adjusted for the ongoing geopolitical uncertainties.

We see the current share price as an attractive entry point ahead of a potential 4QFY26 earnings recovery.

Source: HLIB