PublicInvest Research maintains its forecast and Neutral call on AirAsia, with target price of RM3.19 pegged on 8x FY18F EPS, pending more details on yield data and results for 1QFY17.  

This follows yesterday's announcement of the airline's  2QFY17 preliminary operating statistics, with the group reporting an increase in traffic volume by 4% q-o-q to 18.9 billion revenue passenger-kilometres (RPKs), while load factor declined 1.2 points q-o-q to 87.7% (+2.3 points y-o-y). 

This is on the back of an increase in seat capacity by 5.2% q-o-q. 

AirAsia is scheduled to release its 2QFY17 results and passenger yield data in three weeks’ time. 

AirAsia consolidated operations reported an increase in passengers carried by 5.1% q-o-q to 9.6 million as its seat capacity increased 5.5% q-o-q to 10.8 million in 2QFY17. 

“Although there was no addition to aircraft q-o-q, we understand that the increase in passengers and seat capacity were due to strong demand in air travel during the period, coupled with the introduction of a few new routes and increased frequencies by all three operators in Malaysia (MAA), Indonesia (IAA) and Philippines (PAA),” PublicInvest said in its company update issued on Friday.

Meanwhile, passenger loads remained strong at 88.7% during the quarter (1QFY17 at 89.1%). 

Thailand (TAA) and India (AAI) also reported strong load factors at 86.0% and 89.8% respectively. Despite TAA adding one additional aircraft during the quarter, its passengers carried declined 3.2% q-o-q. Meanwhile, AAI reported a 19% q-o-q jump in passengers carried, with the addition of one aircraft during the quarter.