Malaysia-based AirAsia for its part is set to witness its “best ever period” with most of the carrier’s 240 planes back in the sky and “airfares at their best”, Fernandes said in an interview near Kuala Lumpur International Airport on Monday.
“I’ve never been this bullish before,” Fernandes, who started AirAsia 23 years ago, said. “Southeast Asia is going through a renaissance period of sensible economics, and that’s a good thing.”
On the back of that, AirAsia plans to raise as much as US$600 million (RM2.86 billion) in the coming months, Fernandes said, as he tries to pull off a merger between his two aviation businesses – long-haul carrier AirAsia X Bhd and short-haul airline AirAsia, which is currently a unit under his more diversified company, Capital A Bhd.
Following the merger, which is expected to conclude mid-year, the new entity will look to raise up to US$400 million (RM1.91 billion) via selling equity, he said.
Citigroup Inc and US advisory bank Evercore Inc have been appointed to lead the capital raising. A US$200 million revenue bond, securitised against revenue from new routes, is also expected to be finalised soon, he said.
Fernandes said the merger of the two airlines will create a new firm called AirAsia Group that will subsequently take over AirAsia X’s listing on Bursa Malaysia. The company may also do away with its AirAsia X branding as the aviation businesses consolidate.
AirAsia has ambitions to expand its footprint from a predominately Asian airline to a global low-cost carrier with a more extensive network. It plans to start flying to Kazakhstan, its first route in Central Asia, later this year.
Fernandes, who has previously spoken about succession at the company he founded, said he would retain an advisory role at AirAsia Group following the merger. He will remain CEO of Capital A, his other listed company that will ultimately hold all the non-aviation businesses he has started.
These include Teleport, a logistics company, and Move, an online travel agency that also operates a ride-hailing business. Move is finalising a US$30 million (RM143 million) capital raising while Teleport has raised US$35 million (RM167 million) in debt, he said.
The company’s aircraft-maintenance arm, Asia Digital Engineering, has also managed to raise US$100 million (RM477 million), Fernandes said.
The Financial Times reported in October that Capital A is seeking to raise more than US$1 billion (RM477 billion) in debt and equity and list some of its businesses through a blank-check company in New York.
The company said in November it will seek a Nasdaq listing via a special purpose acquisition company merger with Aetherium Acquisition Corp.
“(The year) 2024 will be a very good year. (The year) 2025 will be an amazing year,” Fernandes said. “There’s a lot of growth for us.”