10 April 2014
Hong Leong Investment Bank (HLIB) is maintaining a 'neutral' stance on the aviation sector on the back of strong growth in passenger movement and liberalisation of Asean open skies agreement.
However, high jet fuel cost and yield pressures, due to overwhelming capacity growth, would have a negative effect on the sector, the investment bank said in a research note today.
HLIB has maintained a 'buy' call on Malaysia Airports Holdings Bhd, which traded flat at RM8.00 mid-day, with an unchanged target price of RM10.55.
It has maintained a 'hold' with an unchanged target price of RM2.22 for AirAsia Bhd which rose three sen to RM2.31 at lunch break.
In another development, the investment bank said klia2 was on track to open on May 2, with Malindo Air, Cebu Pacific, Tiger Airways and Mandala Air confirming their transfer to the new airport.
HLIB also does not expect AirAsia to stay long in the current Low-Cost Carrier Terminal (LCCT) as it would be disadvantaged against other LCCs, given klia2 better and more offerings to air travellers.
"On the other hand, we do not expect significant impact on Malaysia Airports MAHB, should AirAsia stay in LCCT.
"MAHB still earns aeronautical and commercial revenues, regardless of passenger choice of terminal," it said. — BERNAMA
Original Source: www.bernama.com.my
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