AirAsia shares fall when trading opens after more bad news for carrier

Shares of Malaysian-listed AirAsia Bhd tumbled back down on Monday after news of yet another incident over the weekend for Southeast Asia's biggest budget airline. -- PHOTO: ZAOBAO
Shares of Malaysian-listed AirAsia Bhd tumbled back down on Monday after news of yet another incident over the weekend for Southeast Asia's biggest budget airline. -- PHOTO: ZAOBAO

SINGAPORE - Shares of Malaysian-listed AirAsia Bhd tumbled back down on Monday after news of yet another incident over the weekend for Southeast Asia's biggest budget airline.

The Kuala Lumpur-listed stock had rallied on Friday, Jan 2, closing three sen higher than the RM2.72 on Dec 31.

On Monday, however, it opened lower at RM2.70 and was trading down 3.6 per cent at RM2.65 around 10.30am.

This was after an engine of an Indonesia AirAsia plane failed just before it took off from Juanda International Airport in Surabaya on Saturday evening, spooking its passengers. Most of them refused to reboard the plane afterwards.

Earlier last week, Indonesian authorities said that Indonesia AirAsia had violated the terms of its license for the Surabaya to Singapore route by flying on a Sunday, the day Flight QZ8501 plunged into the Java Sea, suspended its flights on that route and announced they would investigate its other schedules.

The bad news over the past week follow the tragic disaster nearly a week ago on Dec 28, Sunday, when Indonesia AirAsia Flight QZ8501 crashed after leaving Surabaya bound for Singapore with 162 people on board.

On Dec 29, the stock slid as much as 13 per cent to 2.56 ringgit before closing 8.5 per cent lower in Kuala Lumpur.

However, it later recovered since investors believed that the business was still sound.

"The knee-jerk share price reaction makes a good buying opportunity," wrote Malaysia-based MIDF Research in a note on Dec 29.