AIRASIA (5099) - [AIRASIA BHD, short term gain for long term pain?] - James Share Investing

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[AIRASIA BHD, short term gain for long term pain?]

According to the 2016 annual report, AirAsia (AAB) flies to 109 destinations across 18 countries. Yesterday, AAB proposes to divest its aircraft leasing operations that are currently undertaken by Asia Aviation Capital Limited (AACL), a wholly-owned subsidiary of AAB, to entities managed by BBAM Limited Partnership for a disposal consideration of USD1.2b. Further, under the Disposal SPAs, AAB and its affiliate airlines will enter into lease arrangements to lease 79 aircraft and 14 aircraft engines from the respective purchasers. In conjunction with the Disposal, agreements have also been entered into for the disposal of up to 98 aircraft to be delivered in the future.

The lease arrangements:
1. Lessor: Herondell, Red 1 and/or its subsidiaries
13 aircraft
12-month period lease rental: USD31.3 million (approximately RM122.0 million)

2. Lessor: Incline Aladdin, Red 2 and/or its subsidiaries
34 aircraft and 7 aircraft engines
12-month period lease rental: USD110.8 million (approximately RM432.0 million)

3. Lessor: Fly Aladdin, Red 3 and/or its subsidiary, Red 4 and/or its subsidiary
32 aircraft and 7 aircraft engines
12-month period lease rental: USD106.6 million (approximately RM415.6 million)

Prospects:
AAB is planning for a net increase of additional 5 aircraft in the first quarter of 2018. In short term, the disposal can lower the gearing of AAB. However, in long term, the operating lease income is going to be affected and operating expenses are going to be higher (because of the leasing of aircrafts and engines). BBAM is not stupid to buy AACL.

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根据2016年报,亚航(AAB)共飞109个城市,在18个国家。昨天,AAB提议要把租借飞机的业务公司Asia Aviation Capital Limited (AACL),AAB的子公司,卖给BBAM Limited Partnership,大约美金12亿。过后,AAB会从买家租回飞机和发动机。根据协议,未来交货的98架飞机也会一起卖掉。

租回安排:
1.拥有者:Herondell, Red 1 and/or its subsidiaries
13架飞机
一年租金: 美金3130万(约RM1。2亿)

2. 拥有者: Incline Aladdin, Red 2 and/or its subsidiaries
34架飞机和7个发动机
一年租金: 美金1.1亿(约RM4。3亿)

3. 拥有者: Fly Aladdin, Red 3 and/or its subsidiary, Red 4 and/or its subsidiary
32架飞机和7个发动机
一年租金: 美金1亿(约RM4。2亿)

前景:
AAB打算在2018第一季增加5架飞机。短期看,这个脱售交易会降低负债率。但长期来看,之前的租借收入会受到影响,营运开支会增加(因为租金)。BBAM这个买家也不傻。

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James Ng





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