AirAsia shares plunge after plane disappearance

KUALA LUMPUR (AFP) – Shares in AirAsia, Southeast Asia’s biggest budget airline, lost more than seven percent in morning trading on Monday in Kuala Lumpur after one of its jets disappeared with 162 people on board.

The firm slumped 12 percent to 2.60 ringgit at the open but recovered slightly to sit at 2.72 ringgit, still down 7.48 percent, by 0215 GMT.

The Airbus jet disappeared en route from Surabaya in Indonesia’s east Java to Singapore after the crew requested a change of flight plan due to stormy weather.

However, Shukor Yusof, founder of aviation research firm Endau Analystics told AFP investors and creditors will remain firmly behind AirAsia and its CEO Tony Fernandes, who transformed a floundering carrier into Asia’s most successful budget airline.

"The market reaction is quite natural. I am not surprised," he told AFP, adding: "I think investors confidence will return quickly since the airline has a solid business model."

Indonesia resumed a sea and aerial search at dawn Monday for the Airbus A320-200 plane that went missing in the Java Sea Sunday morning.

Five aircraft will be sent to search for the plane, including two C-130 military transport aircraft and a Boeing 737, Indonesian air force spokesman Hadi Cahyanto told AFP.

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