AirAsia Falls After Quarterly Loss, Analyst Downgrade

Dec. 1 -- AirAsia Bhd. fell the most in almost five weeks in Kuala Lumpur trading after Southeast Asia’s biggest discount carrier reported a loss.

The carrier slid as much as 11 sen, or 9.9 percent, to 1.00 ringgit, the worst performer on the benchmark Composite Index. The loss was the first since the company went public in 2004.

AirAsia lost money on trades held by the bankrupt Lehman Brothers Holdings Inc. and wrongway bets on oil prices. Chief Executive Officer Tony Fernandes also faces slowing travel demand at the airline’s Thailand hub, which has been paralyzed by a week-long anti-government protest.

“It’s a sell,” Christopher Eng, an analyst at OSK Research Sdn., said in a report today. “We are concerned about its longer-term prospects as its associates continue to bleed and AirAsia reaches saturation point.” He downgraded the stock to “sell” from “neutral” and lowered his price target to 67 sen from 1.10 ringgit.

Even after stripping out the one-time charges, AirAsia still recorded operating losses “significantly below” OSK’s estimates and consensus expectation, Eng said.

AirAsia posted a loss of 465.5 million ringgit ($129 million) in the third quarter as it had a charge of 215 million ringgit to cover costs from unwinding hedging contracts and the likely non-recovery of collateral for trades held by Lehman.

Thai Losses

Thai AirAsia Co., the airline’s Thai unit, had a loss of 250 million baht ($7 million) as travelers shunned the country. AirAsia last week canceled all flights to the Thai capital after anti-government protesters stormed the main terminal of the city’s airport, closing it down.

Thai Airways International Pcl and Thai AirAsia were the biggest operators at Bangkok’s Suvarnabhumi last year, accounting for 28 percent and 12 percent of commercial aircraft movements respectively, Airports of Thailand said on its Web site.

Global air travel declined for a second consecutive month in October, with the International Air Transport Association predicting worse to come because of recessions in many parts of the world. The trade group represents more than 200 airlines.