AIRASIA DOWN AFTER MALINDO LAUNCH
Shares in AirAsia Bhd fell as much as 5 percent in early trading on Wednesday, following the launch of the Malaysia-based rival budget airline, Malindo Airways.
Malindo, will start flying in May next year between Malaysia and Indonesia. Lion Air has a 49 percent stake in the airline, a joint venture with Malaysia’s privately held National Aerospace & Defense Industries Sdn Bhd, which holds the majority 51 percent.
“The immediate impact to AirAsia will be the contraction of its profit margin due to a potential price war,” said Kenanga Research in a note on Wednesday.
It added that AirAsia is likely to be able to make up for any price cuts through other income streams and the wide connectivity within the AirAsia Group.
12/09/2012 : Business Times.
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