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I still remember when I wrote this post. A lot of people get angry and said I will cut my bird because they believed AA can reach 2.4 in this year. Look at the share price now, hahaha
Decades ago, when low cost flight is blue ocean, AA did not have competition,
But now it is red ocean,
Then AA move to ewallet, still red ocean,
AA setup restaurant, still red ocean,
So please expect tight competition
2019 's hedging is less effiecient since oil price is averagely lower. in 2020, i expect oil hedging to bring more income to aa, bcoz almost all its needs has been hedged at 60.
in terms of derivatives, it covers a lot, including ringgit value. and don't forget that airplane uses oil but jet fuel, not brent or crude. apart from brent being main material to jet fuel, there's other additives.
hedging cld be risky, when price is uncertain. for this, i believe, aa hedging in 2020 could be fruitful
AA good time to collect now and keep. More and more ppls going to become AA customers. I try Mas to Sabah last week. Almost same service but Mas dont have in plane purchase. Cannot order junk food. choice of food very limited.
But the worse wld be to invest in tourism related services and manufacturing. Hard hit this quarter. Global PMI PPI has dropped. copper prices hv fallen as well. Signs of bear market