AirAsia’s share price in decline again amid massive oil price rout
Shares of the Malaysian low-cost carrier fell 8% as US crude oil price went under zero for the first time in history.
Share price of Malaysian low-cost carrier AirAsia Group are down over 8% this week.
As at 14:00 SGT on Wednesday 22 April 2020, the airline company’s shares are trading at MYR0.80 apiece, down from Monday’s opening level of MYR0.87 per share.
Tuesday’s historic oil price collapse
AirAsia’s share price decline had coincided with oil’s historic price collapse on Tuesday 21 April, which saw US crude move into negative territory for the first time.
IG’s oil futures prices also reflected the price rout, with WTI crude and Brent crude futures each plummeting as much as 55.83% and 20.05% to as low as US$7.26 and US$20.11 per barrel respectively as at 05:00 GMT on 22 April 2020.
The oil price drops came as oil producers ran out of storage space in the face of the current demand wipe-out caused by the coronavirus pandemic, forcing suppliers to have to pay traders to buy the oil from them, rather than pay heftier storage charges.
IG is a world-leading online trading and investments provider for thousands of financial markets. With CFDs, you can buy long or sell short on the FTSE Bursa Malaysia KLCI Index and the Emerging Markets Index depending on whether you think prices will rise or fall. Start today by opening an account on IG's market-leading trading platform.
Airbus puts up AirAsia’s aircraft orders for sale
AirAsia’s share value had also reportedly fallen after aircraft manufacturer Airbus decided to put up for sale six planes (four A320neo and two A321neo) that AirAsia had initially ordered. According to Reuters, successful buyers can collect the jets from France or Germany in June, complete with optional onboard equipment ordered by AirAsia.
The rumoured ‘fire-sale’ listing was posted as AirAsia earlier revealed that it does not require further additions to its fleet this year, amid ongoing coronavirus pandemic travel restrictions that have greatly impacted the aviation industry.
Both AirAsia and Airbus have declined to comment.
AirAsia Group CEO: ‘we have no revenue coming in’
AirAsia’s share price is down by over 50% since 22 January 2020, when news of the coronavirus outbreak first emerged. Since then, the airline’s stocks have plunged as much as 68% as the contagion worsened globally, forcing countries to impose border closures and lockdowns.
During a press conference on 12 April 2020, Group CEO Tony Fernandes had stated that this was possibly ‘the biggest challenge’ that the company has ever faced, with ‘no revenue coming in’. He added that 96% of the airline’s fleet is currently grounded.
As the number of coronavirus infections in the country grew exponentially, Malaysia had on 18 March 2020 imposed a nationwide “movement control order”, which prohibited all Malaysian citizens from travelling abroad. The sanctions are due to be lifted on 28 April 2020.
Are you bullish or bearish on the FTSE Bursa Malaysia KLCI Index? Either way, you can buy long or sell short on the KLCI Index and the Emerging Markets Index using CFDs and other instruments offered on IG's world-leading trading platform. Start today by opening an IG account.
IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.
The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.
No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. Please see important Research Disclaimer.
Please also note that the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.
React to global volatility
Market volatility continues as coronavirus concerns amplify. Trade with IG and take advantage of:
- Tight spreads – from just 1 point on major indices, and 2.8 on US crude
- Guaranteed stops – they’re free to use, and only incur a fee when triggered
- Round-the-clock assistance – our highly skilled team are available when you need support
Live prices on most popular markets
- Forex
- Shares
- Indices
See more forex live prices
See more shares live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
See more indices live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.
