AirAsia executive jet

THIS week, AirAsia said it is buying a private jet from Caterhamjets Global Ltd (CJG) Jets.

Logically, it should be a normal transaction for a company to own one or two jets given the scale and diversity of its business.

AirAsia is buying the Bombardier BD-7001A10 Global Express 9M-CJG from CJG,a unit of Tune Group, which was founded by both Tan Sri Tony Fernandes (AirAsia group CEO) and Datuk Kamarudin Meranun (AirAsia executive chairman).

The price tag is US$10mil. Hence this is also considered a related party transaction.

In other words, the jet is being sold by its founders through their private vehicle, to their listed company for their use in corporate travels.

The fact that AirAsia has a private jet for use by its top executives who are also the major shareholders did come as a surprise.

However, large corporations owning private jets for use of their top executives is not new globally. Most of the Fortune 500 companies have their own jets and some of the big companies here also own one or two jet aircraft.

Though the numbers cannot be verified since most jets are not registered in Malaysia, a rough estimate is that there are about 50 private jets owned by individuals and companies in the country. The biggest number of private jets are found in the US, though the numbers are increasing in China and India.

Here, Petronas, the Government, Weststar Aviation Group, Usaha Tegas, Sapura group, Hong Leong Group, Rimbaka Foresty, Tan Sri Syed Yusof Tun Syed Nasir, the Johor Sultan, Tun Abdul Taib Mahmud, Datuk Seri Tiong King Sing, and Tan Sri Lim Kang Hoo are among owners of jets, either directly or through their companies.

The reasons why jets are in vogue among the top brass is that they provide convenience, where commercial flights don’t work, and of course for security reasons. Though the biggest advantage of flying in private jets is that it saves time, the hassle, and when there are multiple cities to visit in a short timeframe, it is convenient and efficient.

These are also the reasons given by AirAsia to buy the jet for their top brass. AirAsia also has operations in six countries, the jet is supposed to make flying more convenient and efficient for the top brass.