10 October 2008

AirAsia set to go private

Speculation continues in Asia that AirAsia's single largest shareholder, Tune Air Sdn Bhd, is considering taking the low-cost carrier private.

In a statement to the Malaysia stock exchange, AirAsia said: Ã¢â¬ÅâœThis option is still being developedÃ¢â¬~¦.subject to the availability of financing on acceptable terms from financial institutions and other potential investors in these challenging times, as well as conducive market and industry conditions.Ã¢â¬~

According to a report in The Edge, AirAsia group CEO Tony Fernandes and his associates were believed to have lined up investors from the region to take up stakes in the carrier with the view of holding them as a long-term investment, if the privatisation plan goes through.

Tune Air is controlled by Fernandes and AirAsia executive director and deputy CEO Kamarudin Meranun.

Fernandes said yesterday that AirAsia is looking at the US and Africa for expansion of its routes. He is particularly interested in Hawaii as another of the carrierÃ¢â¬â¢s long-haul destinations.

Ã¢â¬ÅâœWe are going to Europe soon with AirAsia X so we want to expand next to the United States and South Africa. We want a strong presence in these three continents,Ã¢â¬~ the CEO said.

Fernandes said he remained optimistic for the low-cost airline industry despite the current world economic crisis brought on by the collapse of several banks in Europe and the US.

Ã¢â¬ÅâœAirAsia can expect growth next year with the opening up of new routes to Indonesia as well as the introduction of nine to 10 additional aircraft to our fleet,Ã¢â¬~ he said.

Ã¢â¬ÅâœPeople will always travel. They may even switch from flying other airlines to AirAsia during the crisis."

Earlier, Fernandes led AirAsia staff in bidding farewell to the last of the Boeing 737-300 aircraft in its fleet. The carrier has switched to an all Airbus 320 fleet.

By Bev Fearis