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Sunday, October 3, 2010

AirAsia solidifying and perhaps dividend or bonus

AirAsia is everywhere. It is on the newspaper day in day out. With ads, promo, painting it red for years. A person who could afford "regular" airfares will very likely still opt for AirAsia since there is a plethora of flight routes to choose from, and buying online slashing on average 50% cost of a regular airline ticket is worth a man's manliness of being a responsible consumer!

This hot red year seems to be AirAsia's. The stock price has breached the old highs 3 years ago. There are no more fuel cost issues (for now). The booking system has been upgraded. Staff morale has always been high. And branching into branding for sports all over the place has proven to be making deep hard inroads into people's mind. AirAsia is indeed everywhere.

Tony Fernandes, the superman CEO of AirAsia has not stop a bit. His brand building methods are priceless. And now perhaps is a time to contemplate two options for his loyal shareholders:
A) dishing out a hefty dividend
B) giving out stock bonus
C) giving a chance to buy into AirAsiaX

A) is a tried and tested corporate approach that may not be what a maestro like Tony will want to give out. And besides, soon after a dividend for NON-regular dividend payers, the likelihood of seeing the stock price being sold down is there, which will put a psychological burn that takes time to rebuild.

B) is a valid method that will increase shareholder loyalty to a certain extent. Those who want to "cash out" can sell the extra bonus units. Giving them complete freedom to stick and stay, or sell some. Win - win.

C) this method is perhaps trickier (any Bursa regulator experts reading? Comments?) - but it is a known method in Hollywood (not!) - America. This happened with Google. And similarly now with Facebook. Facebook employees are given preferential stock (unlisted since it's not a public company or IPO'd company yet) - but employees are entitled to some "shareholding". And these employees can trade them in private. So on and so forth, once the hype has gotten so large, with private investors buying up until a percentage of these "preferential employee shares" then the company must go public! And boom.. that's how Google created the biggest IPO ever. Hype. Branding Power. It is everywhere (on your desktop search). Ubiquitous.

Hope Tony is reading this and could create some magic here.
Tony Fernandes CEO Blog - The Entrepreneur can be read here:
http://www.tonyfernandesblog.com

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