Seems the fat one estimated his overflights, landing and parking charges totalled Rm 5 million (Just a tad out) Additionally I believe he is still collecting pax service charges. So, the bill is just getting bigger.
So lets have a little look at the approximate amount he owes.
MAB charges 100m
fuel speculation 300m
Lost tourist
dollars Sabah
Sarawak 800m
DHC-6 F-50
repair bill 70m
TOTAL 1.27 Billion Rm
Additionally O' Leary of Ryan Air has stated that if fuel exceeds 135/Barrel his airline would be facing losses this year. The fat one has no hedge at the moment and must be really feeling the pressure. In fact I am certain he is sliding into the red at a great rate of knots.
The increasing costs would definitely cause people to fly less this is exacerbated by increased inflation and the sharp increase in the price of food and gasoline. MAS is taking away a large slice of passengers because MAS's dispatch reliability and connectability is outstanding when compared to air asia. Air asia's response is to further reduce fares to increase seat factor but the bulk of their IPO cash is tied up into the A320 purchases. So the war chest is down to reserves. Additionally I would assume that the fat one decided to bridge his loans in so financing his aircraft acquisitions. This is what a greedy misinformed person in for a quick buck would do. The formula is simple. Estimate the growth in seat factor and required aircraft to fulfil the guesstimated schedule and deduce the lease cost if the additional aircraft were leased which is more expensive than the new aircraft acquisition financing cost broken down monthly. Now borrow the required cash for the purchase against the monthly guesstimated lease cost. I wager this is why air asias debt to equity ratio and gearing is so high. So a further slide into the red. Additionally the overseas investors must be leaving in droves with the current share price and the no dividend policy.
In short. Investors have lost a fortune in investing in air asia. If similar amounts were invested in the property market in Dubai or in BHP or Rio Tinto in the same period the profit margins would have been astronomical.
So FATTY, how does it feel now.