Fernandes proposes single listed Asean holding firm

PETALING JAYA: AirAsia Bhd’s founder Tan Sri Tony Fernandes says he wants to combine the group’s separate units in Malaysia, Thailand, Indonesia and the Philippines under a single listed Asean holding company.

“We are urging Asean Governments to relax ownership restrictions and consider Asean investors as equivalent to local investors,” said Fernandes, who is also the low-cost airline’s group chief executive officer, in a filing with Bursa Malaysia yesterday.

AirAsia, which is listed on Bursa Malaysia, had previously sought to list each operating unit in its respective home country.

One of AirAsia’s key goals, Fernandes said, was to monetise its non-core assets.

The biggest will be Asia Aviation Capital Ltd, its leasing arm, which he said was worth US$1bil.

“We are at the due diligence stage for this and have been surprised at the interest we are getting.

“We continue to work towards an initial public offering price for our crew training centre, AirAsia Aviation Centre of Excellence, and a dual listing for AirAsia on the Hong Kong or New York stock exchanges,” he added.

The company said it had made a net profit of RM465mil in the fourth quarter ended Dec 31, 2016 (Q4’16).

This lifted its full-year earnings to RM2.03bil.

The group’s units in Malaysia, Thailand, Indonesia and the Philippines were operationally profitable in the fourth quarter, the statement said.

Indonesia AirAsia was in the black for the second consecutive quarter and the Philippines was operationally profitable after excluding the one-off charge from the disposal of legacy aircraft.

The Malaysian operations reported an earnings before interest and tax margin of 30%, while Thai AirAsia managed to pull in revenue consistent with expectations despite less-than-favourable conditions.

“We are thrilled to see our investments in Asean beginning to pay off,” Fernandes said.

The group fleet, Fernandes said, would grow to over 200 aircraft this year, and AirAsia is rolling out new destinations in Asean and the wider region, as well as ramping up flights on trunk routes.

“To increase the number of possible connections at our LCC Hub@ KLIA2, we intend to increase to daily frequency up to 16 routes currently operated sub-daily thus giving a boost to our fly-through traffic.

“We have set up a team to develop a proprietary platform which will marry financial technology with our data analytics and digital content. Our current BIG loyalty programme will evolve into a true virtual currency, not just processing inflight purchases for the over 60 million people on AirAsia flights annually but tapping into the large market for remittances and micro-payments in Asean,” said Fernandes.

The group’s unit in India is also growing.

AirAsia India reported the highest aircraft utilisation rate among all the short-haul airlines in the AirAsia Group, managing a 52% capacity increase in the 12 months to Q4’16 with the addition of just two aircraft from an initial fleet of six.

“Our focus remains on building our footprint and introducing our low fares to many more Indian cities,” Fernandes said.

AirAsia Japan (AAJ) is approaching a full launch.

The group expects to open ticket sales from its Nagoya base “soon” and Fernandes said AAJ would end 2017 with a fleet of five aircraft.

We are thrilled to see our investments in Asean beginning to pay off. Tan Sri Tony Fernandes