AirAsia looks outside Asean after divestment
Separate company to offer aviation consulting
A irAsia
wants to extend beyond Southeast Asia by offering aviation consulting and planning, separating aviation from non-aviation ventures.
Tony Fernandes, chief executive of Capital A, said the company completed a conditional sales and purchase agreement for Capital A’s strategic divestment and AirAsia Group’s strategic acquisition of AirAsia airlines.
According to the announcement yesterday, all airlines under AirAsia will be grouped together under the newly listed AirAsia Group, while Capital A will retain four other non-aviation businesses, including Capital A Aviation Services, Teleport, Move Digital and Capital A International.
The total value of the divestment is estimated at 6.8 billion ringgit, or US$1.42 billion.
Mr Fernandes, who recently postponed his retirement for another five years, said the AirAsia Group will mainly focus on airlines in Southeast Asia, while AirAsia Consulting, which was established in 2021 under Capital A Aviation Services, will be rebranded to Capital A Consulting soon and raise its own funds to invest in other airlines outside the region.
He said the recent inquiry to acquire SriLankan Airlines was made by AirAsia Consulting, not AirAsia.
In addition to seeking partnerships with other airlines, Mr Fernandes said the consulting arm will focus on providing consultancy for aviation-related businesses, banking on the extensive experience of AirAsia, which has been growing for 23 years.
Many governments in other regions would like AirAsia to establish lowcost carriers, but they might be outside AirAsia’s area of focus, so providing consultancy would be a more suitable strategy, he said.
After divesting the airline business, Mr Fernandes said Capital A Aviation Services is looking for opportunities to invest in building or operating new airports, with Thailand among the potential candidates as there would no longer be a conflict of interest.
For AirAsia Group, he said Capital A confirmed its order book for 362 Airbus A321 jets, scheduled for delivery between 2024 and 2035.
The agreement with Airbus allows conversion flexibility to opt for A320neo, A321 XLR or A330neo models, or the airline can cancel the order if it leases any newer type of aircraft from the lessor in the future.
Mr Fernandes said combining the order book will enable all AirAsia carriers to sustain growth amid constraints on the supply side, especially given the shortage of aircraft in the industry.
AirAsia Group can make fleet, network, schedule and revenue management more efficient, streamlining all engineering and ground handling contracts for cost efficiency and strengthening its credit and fundraising capacity, he said.
AirAsia Move launched its Asean Explorer Pass on Thursday, an annual travel pass for AirAsia’s international and domestic networks. The previous edition launched in December 2022 recorded more than 80,000 international flight redemptions in a year.