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Alarming? Huge losses for airlines?

Just a few days ago, a good friend who’s a manager and an avid investor (stocks and property) reiterated that we need to look beyond the current happening in order to really understand the investment potential, whether it’s stock market or the property market. Even though we were drinking at the time, I think his message was loud and clear. It’s our analysis and conviction that will yield us potential profits. If we just follow the market, then of course what the market earns / loses, that what we earn or lose.

Airlines all over the world are suffering. No flights means no revenues. No revenues mean depleting cash reserves (if they have one) or the need to obtain financing. (By the way, even the mighty Singapore Airlines asked for money, okay?) . Stop all the rhetorics that the whole world seems to be doing well and only the business entities in Malaysia are doing badly. So, there was this news about Air Asia losing money, I mean HUGE MONEY.

Article in themalaysianreserve.com . AirAsia X Bhd posted a net loss of RM549.7 million for the first quarter ended March 31, 2020 versus a net profit of RM43.33 million in the same quarter last year. Revenue fell 21% to RM924.09 million as seat capacity and the total number of passengers carried decreased, the company said in a filing with Bursa Malaysia.

Group chief executive officer Nadda Buranasiri COVID-19 outbreak has affected it. He said, “AirAsia X Malaysia scaled down flight frequency to all markets in several phases beginning with China in February.” Air Asia X had undertaken a temporary hibernation of fleet under the AirAsia X Group. For full article please refer here: Article in themalaysianreserve.com

The questions include some thoughts of mine here. Do not ask me for the answers, I have mine and you have yours. I give you the questions. Will people travel again when they feel it’s safe enough to travel and the countries reopen their borders? Or is this the end, everyone would now only be travelling within their country forever? Will all airlines be closing down and all the pilots move on to do other jobs instead? Will all airlines be closing down, even those perceived to be strong regionally? Will some airlines be given those lifeline money to survive and be ready to fly again extensively as soon as the international borders are open?

Or do you DARE to fly some new airlines without much experience in the future? Nope, I do not own a single unit of airline stocks today though long time ago, I used to have those of Malaysian Airlines. Happy understanding that perhaps buying that stock is not just about the current situation. Cheers.

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Charles Tan The Founder The Writer Kopiandproperty
Charles Tan

Charles is Founder of kopiandproperty.com He writes from his investment experience for the the past 20 years in investments including property, stock, unit trust and more as well as readings and conversations with many property gurus in the industry. kopiandproperty.com is an independent property blog which is not affiliated to any media company, property developer or even real estate agencies.

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