27-4-2024 (KUALA LUMPUR) AirAsia is set to broaden its horizons beyond Southeast Asia with a new focus on aviation consulting and planning, marking a strategic shift separating its aviation ventures from non-aviation interests.
Tony Fernandes, CEO of Capital A, revealed that the company has finalised a conditional sales and purchase agreement for Capital A’s strategic divestment and AirAsia Group’s strategic acquisition of AirAsia airlines.
Under the announced arrangement, all airlines within the AirAsia umbrella will be consolidated under the newly listed AirAsia Group, while Capital A will retain control over four non-aviation entities: Capital A Aviation Services, Teleport, Move Digital, and Capital A International.
The divestment deal is valued at approximately 6.8 billion ringgit, equivalent to US$1.42 billion.
Fernandes, who recently extended his tenure for another five years, outlined that the AirAsia Group will primarily concentrate on airline operations within Southeast Asia. Meanwhile, AirAsia Consulting, initially established in 2021 as part of Capital A Aviation Services, will soon undergo rebranding as Capital A Consulting. This move will see it raise independent funds to invest in airlines beyond the Southeast Asian region.
Regarding the recent expression of interest in acquiring SriLankan Airlines, Fernandes clarified that it was initiated by AirAsia Consulting, distinct from AirAsia itself.
Beyond pursuing partnerships with airlines, Fernandes highlighted that the consulting arm will also provide expertise to aviation-related businesses, leveraging AirAsia’s extensive 23-year track record.
Fernandes noted that many governments outside Southeast Asia are keen on having AirAsia establish low-cost carriers in their regions. However, given AirAsia’s regional focus, consultancy services present a more viable strategy in such instances.
Following the divestment of the airline business, Capital A Aviation Services is now actively seeking opportunities to invest in the development or operation of new airports. Thailand stands out as a potential candidate, with the absence of any conflict of interest.
In terms of aircraft procurement, Capital A has confirmed its order for 362 Airbus A321 jets, slated for delivery between 2024 and 2035. The agreement with Airbus provides flexibility to switch to A320neo, A321 XLR, or A330neo models, or to cancel orders in favor of leasing newer aircraft types from lessors in the future.
Fernandes underscored that consolidating the order book will enable all AirAsia carriers to sustain growth amidst supply constraints, particularly the global aircraft shortage.
The move comes as AirAsia Group aims to enhance fleet management, network optimization, scheduling, and revenue management efficiency, while also rationalizing engineering and ground handling contracts to drive cost efficiencies and bolster credit and fundraising capabilities.
In other developments, AirAsia Move introduced its Asean Explorer Pass, an annual travel pass covering both international and domestic networks, aimed at facilitating seamless travel within the region. The previous edition, launched in December 2022, saw over 80,000 international flight redemptions within a year.
