AirAsia is looking to expand its horizons beyond Southeast Asia by stepping into the realm of aviation consulting and planning. This strategic move comes as a part of a larger plan to separate its non-aviation ventures from its core aviation business.
Tony Fernandes, the chief executive of Capital A, disclosed that a conditional sales and purchase agreement has been finalised for the strategic divestment of Capital A and the strategic acquisition of AirAsia airlines by the AirAsia Group.
According to the agreement, all airlines under AirAsia will now come together under the umbrella of the newly formed AirAsia Group. Meanwhile, Capital A will retain its four non-aviation businesses, which include Capital A Aviation Services, Teleport, Move Digital, and Capital A International.
The divestment deal is estimated to be worth a whopping 6.8 billion Malaysian ringgits (approximately 52 million baht). Fernandes, who recently postponed his retirement by five years, shared that the primary focus of the AirAsia Group will be on airlines operating in Southeast Asia. He also revealed plans to rebrand AirAsia Consulting, which was established under Capital A Aviation Services in 2021, to Capital A Consulting. This rebranded entity will raise its own funds for investment in airlines outside the Southeast Asia region.
Fernandes clarified that the recent inquiry to acquire SriLankan Airlines was initiated by AirAsia Consulting and not AirAsia. He further added that besides seeking partnerships with other airlines, their consulting arm will also provide consultancy for aviation-related businesses, leveraging the extensive experience of AirAsia, which has been in business for the past 23 years.
The Capital A chief revealed that many governments outside their focus area have expressed interest in establishing low-cost carriers with AirAsia. However, he believes providing consultancy would be a more strategic move for the company. Post the divestment of the airline business, Capital A Aviation Services is seeking investment opportunities in the construction or operation of new airports. Thailand is among the potential candidates for such an investment, as there would no longer be a conflict of interest.
Airbus jets
In terms of the AirAsia Group, Fernandes confirmed an order book for 362 Airbus A321 jets, scheduled for delivery between 2024 and 2035. The agreement with Airbus also provides conversion flexibility to opt for A320neo, A321 XLR, or A330neo models, or the option to cancel the order if the airline leases any newer type of aircraft from the lessor in the future.
The Capital A CEO believes that consolidating 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. He added that the AirAsia Group can make fleet, network, schedule, and revenue management more efficient, streamline all engineering and ground handling contracts for cost efficiency, and strengthen its credit and fundraising capacity, reported Bangkok Post.
The AirAsia Move launched its ASEAN Explorer Pass on Thursday, an annual travel pass for AirAsia’s international and domestic networks. The previous edition, which was launched in December 2022, recorded more than 80,000 international flight redemptions within a year.
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