The AirAsia Aviation Group is currently in the process of increasing its stake in AirAsia Philippines by 100%. This was revealed by no less than Capital A CEO Tony Fernandes during a press briefing in Kaula Lumpur, Malaysia earlier today. It may be recalled that the Romero family-led F&S Holdings, Inc. sold its 60% stake in the airline to AA Com Travel Philippines, Inc. last June 2023 (40% of AirAsia Philippines is owned by Capital A Berhad).
In another development, Capital A Berhad, the parent company of AirAsia, shared during the same press briefing the initiation of a non-binding letter of offer with AirAsia X Berhad. This move aims at the proposed disposal of its aviation business, encompassing AirAsia Berhad (AirAsia Malaysia) and AirAsia Aviation Group Limited (AirAsia subsidiaries in Thailand, Indonesia, Philippines, and Cambodia). The strategic maneuver is designed to streamline the group’s operations, leading to a business-centric valuation of the separate entities and potentially unlocking greater shareholder value.
Concurrently, AirAsia X announced its entry into a non-binding letter of acceptance with Capital A for the proposed acquisition of its aviation businesses, specifically AirAsia Berhad and AirAsia Aviation Group Limited. This strategic initiative positions AAX as the predominant regional aviation provider for short and medium-haul routes under the AirAsia brand, paving the way for enhanced market position, operational efficiency, and overall cost savings.
“All businesses across Capital A have been thriving and we are ready to grow. We need to raise funds for business expansion, but gaining access to capital has been challenging due to Capital A’s Practice Note 17 (“PN17”) status. We have been engaging committed investors who have expressed a strong preference for a pure aviation play,” said Fernandes.
The decision to consolidate airline businesses through these acquisitions capitalizes on AirAsia X’s robust recovery trajectory, particularly after its removal from the Practice Note 17 (PN17) status in November 2023. Further details on the Proposed Acquisitions, including their impact on various financial metrics, are expected to be disclosed in due course, subject to the finalization of the share sale and purchase agreement.
In tandem with these strategic moves, AirAsia has announced two key leadership appointments crucial for the airline’s next phase of growth. Datuk Captain Chester Voo assumes the role of Deputy Group Chief Executive Officer (Airline Operations), focusing on optimizing core airline functions, risk mitigation, and overall performance enhancement. With over 11 years of experience, including a previous stint as the CEO of the Civil Aviation Authority of Malaysia (CAAM), Captain Voo brings a wealth of expertise to the position.
Farouk Kamal has been appointed Deputy Group Chief Executive Officer (Corporate) and will oversee Corporate functions, including Finance, Corporate Finance, Aircraft Leasing, Legal, Investor Relations, and Strategy. With a background in Investment Banking and previous leadership roles, including CEO and CIO at Urusharta Jamaah, Farouk is well-positioned to contribute to the strategic direction of the Aviation Group.
AirAsia anticipates a full restoration of its fleet, with 191 aircraft expected to be operational by the end of the first quarter this 2024; 166 of which are already in service. Demonstrating a robust recovery trajectory, the group aims to achieve 83% of pre-pandemic capacity levels by the close of the first quarter of 2024, with plans for sustained growth in the future.