Saturday, December 8, 2018

Airasia is not pulling back from India

In my previous analysis, I have opposing view towards the Maybank's analyst's view that Airasia is pulling back from India.

True enough, it is not pulling back from India as in its plan through the analyst's briefing. By end of 2018, Airasia will have 20 planes in India to enable it to fly internationally. In its plans for 2019, Airasia will allocate 6 planes for India (out of its total 24 net additions). Watch the analyst's briefing below (26:00 to 26:40). In its plans for 2019, net additions are as follows: 6 for Malaysia, 4 Thailand, 3 Indonesia, 3 Philippines, 6 India, 2 Japan.




Hence, it is probably being the most aggressive for India, planning a 30% growth in terms of planes for India.

I have explained before for Airasia to operate successfully in India, probably the best strategy is by having a hands off strategy. It's overall growth plan and how it franchises and automate processes is Airasia's strength.

5 comments:

Anonymous said...

You need to read this:

https://www.bloomberg.com/opinion/articles/2018-12-02/why-india-s-airlines-can-t-turn-growth-into-profits

felicity said...

As in many analysis, sometimes Bloomberg's can be very shortsightedness. India's airline business is seeing consolidation, which is a good thing and this is happening earlier than the US industry which used to have tens of active airline companies.

What we are seeing is as the industry purge out the weak ones, then profitability will commence. In the meantime, these players are investing. What many people is expecting is that profitability to be earned during investment stage where new routes are created.

Jun said...

Hi Felicity! Is it a good time to top up on WCEB?

felicity said...

Hi Jun

Hard to say whether it is good time looking at sentiment nowadays, but I guess I can say it is very cheap.

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