18 March 2020
Low cost carrier AirAsia Group Bhd (AirAsia) will likely see a drop in its passenger traffic figures in March following the Movement Control Order taking effect.

Researchers at MIDF Amanah Investment Bank Bhd (MIDF Research) expect to see a further decline in international passenger traffic amidst travel restrictions for outbound travel for locals and inbound travel for foreigners over a 14-day period.
“Recall that the March 2019 passenger traffic for klia2 reached three million passengers,” it said in a follow up yesterday.
International passengers contributed 66.2 per cent of total passengers for that month, it added.
“With the Movement Control Order in place, we expect to see a further decline in international passenger traffic.
“Based on our preliminary analysis, the drop in total passenger traffic for klia2 could reach more than 30 per cent year on year (y-o-y) for March 2020.
“As a result, we have lowered our total passengers carried forecast for FY20 by around 19 per cent.”
MIDF Research also did not discount the possibility of more aircraft redeployment for domestic routes.
“Aside from that, the stimulus package announced by the government of Malaysia which covers domestic tourism will partially support domestic travel.
“Therefore, we do not discount the possibility of AirAsia redeploying its aircraft for domestic routes especially during festive periods such as Hari Raya Aidilifitri, provided that fears of the Covid-19 pandemic have waned by then.”
Taking into account of lower passengers carried by the AirAsia Group in FY20, its earnings estimates for FY20, FY21 and FY22 have been reduced to RM145 million, RM248.8 million and 513 million respectively.
“Following the revision in our earnings estimates, we revised our target price to RM0.63 per share.
“AirAsia Indonesia and AirAsia India used to be the darlings for AirAsia Group. However, the increasing contagion of the Covid-19 pandemic outside China and wider travel bans by countries such as India will exert additional pressure on AirAsia.
“Perhaps domestic travel in Malaysia could act as a cushion in these challenging times. All in, we maintain our neutral amidst the overall tough operating environment.”
Source: theborneopost.com
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