KUALA LUMPUR (March 24): CIMB Research has maintained its “Reduce” rating on AirAsia X Bhd (AAX) with a lower target price of 15 sen (from 17 sen) and said AAX could report much lower losses in FY16 due to lower oil prices.

In a note today, the research house however said a typhoon of competition is approaching, which could cause more turbulence.

It said Malindo Air, which could soon rebrand as Batik Air Malaysia, is looking at launching to Taipei, and to South Korea, Japan and Australia via one-stop flights.

“Meanwhile, AAX’s new Gold Coast-Auckland route, and the planned Osaka-Hawaii route, may result in losses during the gestation period in FY16-17.

“We maintain our Reduce call on AAX, with a lower target price of 15 sen, based on an unchanged 1x CY16 P/BV, as our core loss estimates are increased,” it said.