Bidding for AirAsia’s leasing arm in last lap
Management changes will see Riad Asmat take over as AirAsia CEO
SEPANG: The bidding for budget carrier AirAsia Bhd’s leasing arm is in its final stages, with group chief executive officer (CEO) Tan Sri Tony Fernandes hoping that the sale can be completed soon.
The sale of the leasing arm is part of the move to streamline the airline’s operations and assets ahead of a reorganisation that will see a holding company, AirAsia Group Bhd, assuming the listing status of AirAsia and including the carrier’s regional associates in Indonesia, the Philippines and Thailand. AirAsia currently holds a 49% stake, respectively, in AirAsia Indonesia, AirAsia Philippines and AirAsia Thailand.
The reorganisation will make the financial performance of the various units more transparent, as the airline operations will be separate from the non-airline operations. A court-convened shareholders’ meeting has been scheduled for Jan 8 for the reorganisation. Upon shareholders’ approval, the various transfers of the assets will be executed and this process can take up to the first quarter of next year.
Fernandes was commenting on the bids by various parties following the announcement of management changes that will see Riad Asmat, 46, taking over from Aireen Omar as AirAsia CEO from Jan 10.
“We are in the last leg and happy with the bids. We hope to complete it (by March 2018). I am very optimistic,” he said at a media briefing.
However, Fernandes declined to name the bidders and the value of the leasing arm, Asia Aviation Capital Ltd. Earlier reports, however, have suggested it could be worth more than US$1bil. After the sale, AirAsia is expected to pay a special dividend to shareholders.
The management changes will see Aireen being promoted to deputy group CEO for digital, transformation and corporate services. She will spearhead the airline’s digital transformation, as well as lead the non-airline operations that include BigPay, BIG Loyalty, Travel360.com, AirAsiaGo and several others.
Besides Riad and Aireen’s appointments, Bo Lingam, Fernandes’ longtime lieutenant, will assume the role of deputy group CEO (airline business). Captain Adrian Jenkins has been appointed as chief operations officer from group director of flight operations, while Rosman Omar, the current deputy group CEO of strategy and mergers and acquisitions, will now be the executive director of AirAsia International Ltd, the holding company of all the AirAsia group overseas investments, including the joint ventures.
“Today’s announcement takes us into a new direction, a new exciting world. Bo will be my left-hand man and Aireen, the right,” Fernandes said.
Hours before the press conference, speculation was rife that Fernandes was about to announce his resignation.
In his tweet, he said, “I told analysts we were worth RM3 when we were 70 sen. Now, I say we are worth RM6.
“There is no airline that has as much growth as AirAsia with a huge digital strategy that has assets worth more than our present market capitalisation....Laughable that there is a rumour I’m retiring.”
His tweet saw many responses, with well-wishers wishing him well while others told him not to leave. There were also people who were happy to see the back of him.
During the media briefing, he reiterated, “I am not resigning, I am not retiring. Too bad (for those who want me to go). I am going to be here for a while.”
An analyst contacted said “as long as Tony and Din (Datuk Kamarudin Meranun) are there, whoever becomes the CEO is inconsequential”.
AirAsia shares inched up four sen to close at RM3.23 yesterday.
On turning AirAsia into a digital company, Fernandes said the cost savings operationally could be 5% to 10% realised by the end of next year.
“This is just from the fuel and engineering spares, it could be far greater (if other areas are included). But there are many areas we can work on to offer digital services, as we have a 75-million passenger base that we can ride on,” he said.
Fernandes expects the airline to end the year by carrying 73 million passengers.
“It is a good fourth quarter and revenue is going strong and this is despite the competition,” he said, adding that the strong ancillary income, which includes baggage, seating choice and food and beverage, will offset rising jet fuel prices.
He also noted that the airline would add 30 planes to its fleet next year, which will bring the total to over 200 planes and see capacity growth of about 13% to 14%.
SEPANG: Riad Asmat, who will take over from Aireen Omar as budget carrier AirAsia Bhd’s chief executive officer (CEO) on Jan 10, has a fear of heights.
He told StarBiz that AirAsia group CEO Tan Sri Tony Fernandes had forced him to slide down the fourth floor of the RedQ complex to the podium where Fernandes was making the announcement on his appointment. “You have to slide down or you are fired,” Fernandes said jokingly.
“My biggest fear is heights,” Riad, 46, said. Notwithstanding that, he gamely slid down the chute which doubles up as a staircase at the AirAsia head office in klia2 with a huge grin on his face that was duly captured by the media yesterday.
Riad, a father of three, recalled that “the last time I walked on Langkawi SkyBridge, my toes were sweating and that is why I don’t get on roller coasters”.
An unusual fear for an airline CEO whose job requires him to be a frequent flyer at cruising altitudes averaging 30,000 to 35,000 feet. His resolve, however, came through when asked how he planned to overcome this fear.
“I will do it,” came his reply.
Said Fernandes:“I see Riad as someone with good experience and one who understands our culture. He is a stickler for details and that is important to us. More importantly, he is a people’s person and mixes around well even with our ramp boys and crew.
“He also has good understanding of (air) regulations, and hopefully, will be able to convince the industry regulators that one size does not fit all.”
Despite his fears, Riad is looking forward to his new role and said this was an opportunity for him to learn, adding that “I am a fast learner and hope to improve on regulator (interaction)”.
Before joining AirAsia, Riad was the director of corporate planning, strategy and business development at Naza Corp Holdings Sdn Bhd. and prior to that, president/CEO of Caterham Automotive in Britain.