Fernandes onboard Capital A for five more years

Entrepreneur puts retirement plans on hold to resume CEO post besides taking on the role of airline business adviser

KUALA LUMPUR: Capital A Bhd ended months of speculation swirling around Tan Sri Tony Fernandes’ continuity as its head honcho after announcing that it is extending his tenure as the chief executive officer for five more years, and appointed him as an airline business adviser.

“My retirement plans had to be put on hold to ensure we survive. Now we are almost out of it.

“I certainly didn’t think I would be doing this as a 60-year-old. But I think the board, the bankers, and shareholders want me to stay on for a bit longer to ensure that we maximise what we have built,” Fernandes told reporters at a briefing here yesterday.

“Hopefully from this week and today is the start of a comeback with my appointment, so that ends the speculation (of retirement). Am I staying? Am I going? What is my job going to be?”

In the next five years, he will continue to build the other four pillars, which were set up during the pandemic years, and to list these divisions separately.

The divisions are teleport, move digital, Capital A aviation services group and Capital A international.

In addition, Fernandes said he is working on creating a new company called Airasia Group, which is the combination of short and medium haul airline.

“My role in aviation is to build the next five years. My goal will be on the strategic nature giving Bo Lingam (Airasia’s Tharumalingam Kanagalingam) and the board strategic insights on how we are going to grow from 200 to 400 aircraft, what the new model is and how best we use the assets that we have.

“We also need to keep the link between Capital A and Airasia Group, which is a large part of my job,” Fernandes added.

Tan Sri Jamaludin Ibrahim, chairman of Airasia Aviation Group Ltd said: “In his new role Tony will not only provide strategic oversight to Airasia Aviation Group, including expansion and succession planning, he will also be the key conduit between Capital A and the aviation business ecosystem to ensure all mutual opportunities are leveraged for maximum benefit.

“We also need to keep the link between Capital A and Airasia Group, which is a large part of my job.” Tan Sri Tony Fernandes

“In addition, Tony will continue ongoing dialogue with key stakeholders including tourism and government, lessors, bankers and suppliers including Airbus and General Electric.”

Airasia Aviation Group is the holding company under Capital A for its group of airlines and airline investments portfolio companies.

For Fernandes, one of the immediate plans is for Capital A to lift itself out of the Practice Note 17 (PN17) status.

“Investors want clarity, which we couldn’t give for two reasons: One, we didn’t know when the borders were going to open and two, we couldn’t tell when we were going to get out of PN17. We had an enormous handicap to other airlines, so we haven’t been able to sell our story as well,” he said.

He added that the company would be making announcements on its PN17 status by April 30, which is the extended deadline for submission of its regularisation plans.

These proposed corporate exercises include merging Capital A’s airline businesses with Airasia X Bhd, the listing of branding businesses in the United States, and raising accounting gains to offset its negative equity position of some Rm10.47bil as at Dec 31, 2023.

Commenting on reports of its bid to purchase Srilankan Airlines, Fernandes clarified that its consulting arm Airasia Consulting Sdn Bhd parked under Aviation Services division, would raise its own funds for the acquisition if its bid is successful.

“Just to clear that up for everyone, Airasia is not buying Srilankan Airlines. Airasia Consulting, which will set up its own fund, is looking at buying Srilankan Airlines. So, it’s not Airasia,” he said.

“Airasia Consulting will be changing (its name) to Capital A Consulting very soon. So, that’s for airlines who want to consult our 23 years of experience, but (Airasia Consulting) is also looking for opportunities to invest in airlines outside of Asean. Airasia is fully focused on Asean. That’s our goal,” he explained.

Meanwhile, Airasia Consulting chief executive officer Subashini Silvadas said the company has registered its interest in the acquisition of Sri Lanka’s national carrier but has yet to submit a price bid as it has not gone into the due diligence process.

“Yes, we are involved in the bidding process. We have submitted our request for quote on April 22. The intention is for us to be selected. If we are selected, we will go ahead with the due diligence process. This is really the initial stage. We will still tap the airline experience from Airasia but this is a consulting project.

“The next stage will be when it decides and reveals the documents and evaluates if we are suitable as one of the contenders to purchase the airline.

“More importantly, this will allow us to do the due diligence. This is part of our business model and we want to be in this field. We have the expertise and understand the Sri Lankan market landscape,” she said.

Silvadas added that the entire bidding process would end by August.

The Sri Lankan government will announce the selection of the pre-qualified bidders within this month and due diligence will be made in June or July.

Reuters reported on Monday that the Airasia group is among six bidders for Sri Lanka’s state-run carrier, as the island nation looks to reduce losses incurred by government-owned enterprises under a Us$2.9bil International Monetary Fund programme.