OSK: AIRASIA, JETSTAR COST-SAVING COLLABORATION MAY BOLSTER BOTTOMLINES

KUALA LUMPUR, Dec 21 (Bernama) -- The potential cost-cutting collaboration
between AirAsia and Jetstar Airways is definitely welcome, said OSK Research.

"Any positive cost reduction may eventually bolster their bottomlines," it
said in a research note here Monday.

However, OSK Research also stated, it was not overly excited with the
proposed cooperation as it was still preliminary.

"We do not see it materialising so soon," it said.

It was reported that AirAsia and Jetstar, Qantas Airway Ltd's low-fare unit,
are discussing cooperation towards cutting costs amid rising competition for
the budget-conscious Asian traveller.

AirAsia has not made any formal announcement pertaining to the cooperation.
However, a news report said a partnership may cover procurement and ground
handling, generating as much as 10 per cent in cost savings.

"Despite the potential collaboration, we remain mindful that high crude oil
prices may squeeze AirAsia's margins.This is especially so, given that price
undercutting activities, may persist in the short to medium term," OSK Research
said.

Due to AirAsia's recent weaker than expected results, OSK Research has kept
a "sell" rating for the budget airline.

-- BERNAMA


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