HLIB expects amicable solution for MAHB, AirAsia

13 Aug 2015 / 05:37 H.

    PETALING JAYA: HLIB Research expects Malaysia Airports Holdings Bhd (MAHB) and AirAsia Bhd to reach an amicable settlement following the low cost carrier's letter of demand seeking RM409 million from the airport operator for alleged losses and damages arising from its operations at klia2 and the previous low cost carrier terminal.
    "Should there be no mutual solution, we do not expect any near term financial impact to MAHB earnings given that legal proceedings will usually be prolonged up to five years," the research house said in a report yesterday after a technical briefing by MAHB.
    It said during the briefing, MAHB management reassured its utmost priority in ensuring the safety of stakeholders (air travellers and workers) at klia2, after one of AirAsia's aircraft had a roll back incident there.
    "Despite AirAsia's allegation, we opine that operations in klia2 are still safe as MAHB's safety committee is continuously monitoring the settlement issues," added HLIB.
    HLIB said going forward, it expects MAHB's budget allocation for resurfacing settlements to gradually decrease as the settlement intensity reduces overtime.
    "We note that costs spent on the resurfacing is recognised as capex and amortised across the concession period, which is lower impact on MAHB earnings."
    HLIB maintained a "buy" recommendation on MAHB with an unchanged target price of RM7.40.
    "We believe the recent shares sell down is overdone," it added.


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