Its CEO Tony Fernandes expects demand to be “extremely strong” even as oil prices are soaring and currencies are weakening against the US dollar.
In fact, Capital A’s subsidiary AirAsia is already looking to add 20 more aircraft to its fleet “for the first time in a long, long time even before Covid”, Fernandes told CNBC’s “Squawk Box Asia” yesterday.
However, he indicated that there are immediate challenges, one of which is getting the aviation group’s fleet back out of maintenance, a process he said would be a “problem”.
“In AirAsia we have 205 aircraft and in AirAsia X we have about 20 aircraft … getting slots and obviously getting them ready for service have been an issue,” he said.
Fernandes’ decision to step down as AirAsia X group CEO this week has drawn negative reaction in the market, but it has not dented his positive outlook.
AirAsia X shares dropped after the announcement on Monday and it was still 5% down as of this morning.
However, Fernandes has played down the market reaction, saying that whatever he did would get “blown out of proportion”.
“I went in there (AirAsia X) for a short period … I just went in there to kickstart an airline that would have been heavily restructured and was in hibernation,” he said.
Fernandes said he expected AirAsia X to emerge from its PN17 status. The company was declared financially distressed in October last year.
He said he felt that putting AirAsia X on PN17 status was a harsh move but “we have actually turned a negative into a positive”.
In his four months as CEO he created a cargo business in AirAsia X that, he said, had contributed about 20% of the airline’s revenue during the pandemic and would continue to play a vital role in its recovery.
He added that AirAsia X now has “very strong footing” and better cost structure.
Fernandes said he was now shifting his focus to Capital A to “unlock its real value”.
He told CNBC that a newly-formed holding company with all aviation services, including its engineering arm Asia Digital Engineering, restaurant brand Santan and its consulting arm, would emerge “very soon”.
“My job now is to make sure we deliver profitability, good cash flow growth, have the right funding on all of these and from where we were … the sky looks really good,” Fernandes said.
He also expressed confidence in the future of Capital A.
Fernandes said he was not worried even as the economy tightened since the holding company would benefit as a “value provider”.
“I’ve been through many slowdowns in the economy and people will go to the best-value operator,” he added.
He said the boom in e-commerce brought on by the Covid-19 pandemic had brought a huge opportunity.
Similarly, logistics also gained, he said. “For the first time in our history, we’ve taken three cargo planes,” he said.
Fernandes pointed out that while it still took a long time to ship products even from Kuala Lumpur to Singapore, AirAsia could do it in a day.
“And so we will do point-to-point logistics, change the whole model, and we see a huge opportunity for us,” he told CNBC.