NO FRESH LEADS: Analysts expect AirAsia shares to take a beating following missing Flight QZ8501
AIRASIA Bhd is likely to face turbulent sessions on Bursa Malaysia
following the disappearance of Singapore-bound Indonesia AirAsia Flight QZ8501 yesterday.
Analysts expect the low-cost carrier’s shares to take a beating today.
Indonesia AirAsia officials confirmed that the aircraft carried seven crew members and 155 passengers, of which 149 were Indonesians, three South Koreans, one Singaporean, one Briton and one Malaysian.
Analysts were unanimous that AirAsia’s share price will trend down at the start of trading today, but by how much will depend on the status of Flight QZ8501.
“AirAsia has typically been one of the stronger stocks on Bursa Malaysia, given its track record and especially when compared with the embattled national flag carrier Malaysia Airlines,” said an aviation analyst.
“AirAsia shares will still take a beating ... but by how much, depends on further updates on the missing flight.”
A check on Bloomberg data showed that AirAsia has been on an upward trend after falling to its lowest at RM2.25 this year on July 11. Its highest ever Bursa close was last Friday at RM2.94.
Alliance Research Sdn Bhd had, in a recent report, kept its “buy” call on the airline with a target price of RM3.20, citing yield recovery, cheaper oil price as well as higher passenger travel demand.
Malaysia and the aviation world were first rocked by the disappearance in March of MAS Flight MH370, which until today remains a yet-to-be-solved mystery. The plane was carrying 239 passengers and crew on board.
AirAsia had in April drawn flak with an article in its inflight magazine which, in the last paragraph read: Pilot training in AirAsia is continuous and very thorough. Rest assured that your captain is well prepared to ensure your plane will never get lost.”
Executive chairman Datuk Kamarudin Meranun promptly came forward to clarify that “unintentionally and regrettably, the issue carried an article that discusses GPS and radar” and the article was a monthly aviation column prepared well in advance and was not a jab against MAS. The article, he explained, was printed before the tragic MH370 incident. The April edition was also removed from all AirAsia flights.
In July, disaster struck again when MAS Flight MH17 was shot down over Ukraine, killing all 300 passengers and crew on board.
The disappearance of Flight QZ8501 yesterday adds to an unprecedented tragic year for Malaysia’s aviation industry.