AirAsia's minority structure clouds impact of air crash

AIRASIA is sharing the pain of its minority investments. The Malaysian budget carrier owns just 49 per cent of the Indonesian unit that was struck by tragedy when one of its planes crashed into the Java Sea on Dec 28. AirAsia shares have since lost more than 15 per cent of their value. Shares in its smaller budget long-haul affiliate AirAsia X have fallen 8 per cent. The Malaysian benchmark index fell 3 per cent over the same period.

It's a reminder that the group's particular business model can't entirely contain the financial pain.

Apart from Indonesia, AirAsia operates a series of minority-owned affiliates in Thailand, the Philippines and India. This allows it to get around foreign ownership rules. Accounting rules also partly insulate the parent from profit fluctuations in Indonesia. Although the unit has recently returned to the black, AirAsia won't book its share of any gains until earnings exceed the division's accumulated losses.