SEPANG: Capital A Bhd
, the parent company of AirAsia, plans to sell all its airline businesses to its sister company, AirAsia X Bhd (AAX), which is aimed at enhancing operational efficiency and better cater to the overall market demands.
Chief executive officer (CEO) Tan Sri Tony Fernandes said the move was part of a comprehensive consolidation plan to transfer all short-haul businesses in Malaysia, Thailand, Indonesia, the Philippines and Cambodia to AAX, which currently operates mid-haul flights.
“This move is aimed at streamlining the group and facilitating a business-centric valuation of the separate entities, potentially unlocking greater value for shareholders,” he said at a media briefing here yesterday.
Fernandes explained that there is a need to raise funds for business expansion, but accessing capital has been challenging due to Capital A’s Practice Note 17 (PN17) status.
He highlighted that the group has been engaged with investors, who strongly prefer a focused approach on aviation.
Fernandes also noted the official sales and purchase agreement will be announced in a couple of weeks. Currently, no details on the overall valuation have been disclosed.
“Following the disposal, the aviation business is poised to benefit from focused management and a well-defined strategic direction, which will boost the aviation business’s capacity to seize growth opportunities, expand market share, and ultimately achieve enhanced profitability,” he said.
After the transfer, Capital A will continue running four businesses, including Teleport for logistics, Santan for its food and beverage (F&B) business, AirAsia Move for its digital services arm and Asia Digital Engineering (ADE) with a focus on aircraft maintenance, repair and operations services.
Fernandes expressed his confidence that through the separation of the aviation business from Capital A, the non-aviation businesses within the group, which have been currently undervalued by the market, will also be recognised for their intrinsic value and potential.
Following the sale of the aviation business, Capital A shareholders would become shareholders of the two strong listed companies, he added.
“We believe this move will bring greater clarity to investments, create a more focused shareholder base, and ultimately unlock value for our shareholders,” he said.
Meanwhile, yesterday, AirAsia Aviation Group Ltd (AAAGL), the aviation arm of Capital A, appointed Datuk Captain Chester Voo and Farouk Kamal as the deputy group CEOs.
They will serve as the left and right arms of AAAGL group CEO Tharumalingam Kanagalingam, better known as Bo Lingam.
Voo, previously the CEO of the Civil Aviation Authority of Malaysia (CAAM), will spearhead airline operations.
His role will centre on optimising core airline functions, enhancing efficiencies, and identifying as well as mitigating potential risks to elevate the overall performance of the airline.
Fernandes believes that Voo’s 11 years of experience with AirAsia and his past role as CEO of the CAAM make him well-suited for his new position.
“With a proven track record in the airline industry including over 11 years with airasia, he brings a wealth of experience to the role,” he said.
Meanwhile, Farouk, formerly the CEO of Urusharta Jamaah Sdn Bhd, a special purpose vehicle under the Ministry of Finance tasked with managing distressed assets from Lembaga Tabung Haji in 2019, assumes responsibility for corporate functions within AAAGL. This includes overseeing finance, aircraft leasing, legal matters, investor relations, and strategy.
Fernandes said Farouk would also oversee internal audit and risk management for the group.
He believes the appointments were in line with airasia’s preparation to embark on its next phase of growth to shape the group’s future.
Meanwhile, Bo Lingam said the synergy between the seasoned leaders and the existing team is expected to fuel further innovation.
“Their combined efforts will allow us to continue to focus on our strategic decision-making, long-term planning, and the group’s overall organisational direction,” he added.
In 2023, Fernandes said the AAAGL had effectively restored about 74% of its pre-pandemic capacity, with 191 planes reactivated out of its total fleet of 212.
“Hopefully, by March, we will have around 206 planes that includes our new planes from American-based Frontier Airlines and MYAirline,” he said.
He expressed pride in successfully rehiring all 2,600 of the group’s employees who were previously made redundant due to the pandemic.
Meanwhile, on passenger traffic, Fernandes said that in 2023, the group had rebounded to about 78% of its pre-pandemic levels.
According to him, the group’s domestic business reached an all-time high with a load factor of 92.7%, while the international load factor showed signs of recovery, reaching 83.1%.
“Demand was very strong and in December, we had our best ever performance,” he said at the media briefing.
Looking forward, Fernandes aims to take AirAsia from its current 90 million passengers to 200 million by 2028, and plans to expand the fleet to 333 planes by the same year.
“My dream, when I retire in five years, is to have five listed companies -- one in the United States and four in Asean countries,” he concluded.
