March 30, 2011

AIRASIA - OSK upbeat on AirAsia-Expedia venture

Stock Name: AIRASIA
Company Name: AIRASIA BHD
Research House: OSK

OSK Research is fairly optimistic on AirAsia Bhd's new joint venture (JV) with Expedia, the world' largest online travel agency, as the companies leverage on each other's strengths to create synergy.

In a note today, OSK Research said the JV would give AirAsia a bigger distribution channel to market its route offering and its holiday packages in an attempt to boost ancillary income moving forward.

"This JV will boost AirAsia's ancillary income and improved margins over the longer term," it said. OSK Research has maintained its 'buy' recommendation on AirAsia at an unchanged target price of RM3.42.

"Although there is a lot of room for growth for the JV, we still think it is too early to make any upward revisions in our forecast as we have inputted a fairly reasonable ancillary income growth assumption going forward," it said. -- Bernama

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