The new carrier will be unveiled within the next one to two months, the low-cost Southeast Asian airline group is already repositioning some of its aircraft for the new venture, Fernandes told Bloomberg Thursday.
The move follows AirAsia’s multibillion-dollar order – hailed by Canadian Prime Minister Mark Carney as the single largest purchase of Canadian-made commercial aircraft in history – for 150 Airbus SE A220 jets. The acquisition forms part of Fernandes’ broader strategy to grow AirAsia’s fleet with smaller, more agile aircraft capable of reaching destinations across Asia.
“Why waste a crisis? There are opportunities in a crisis,” the 62-year-old said. “We cannot control what happens in the Middle East, but we have to take a view that it’s not going to last for two years.”
AirAsia co-founder Tony Fernandes. Photo courtesy of the company |
AirAsia’s long-standing policy of leaving fuel costs unhedged has weighed heavily on its stock, which has shed roughly 35% since the outbreak of the Iran war.
Fernandes nonetheless stood firm on the hedging stance, maintaining that oil prices will eventually retreat.
“Obviously people who hedge now are in the money, but over a longer period, hedging never really works,” he said. “So we continue to not hedge like many American airlines and we feel oil is bearish.”
To finance its growth ambitions, AirAsia is looking to raise up to US$600 million through a bond sale and is in discussions with Malaysian banks over a sizeable refinancing loan aimed at reducing borrowing costs. Fernandes also said he plans to court Canadian pension funds for additional investment.
The airline has also been reportedly in discussions about a possible expansion into Vietnam.
AirAsia currently operates across Malaysia, Thailand and Indonesia with a fleet of around 250 predominantly single-aisle Airbus aircraft. Its latest order will bring its total single-aisle backlog to approximately 550 jets.
In a separate development, AirAsia has confirmed plans to launch flights from Bahrain, with an eye toward establishing a locally based unit in the Gulf island nation.
Fernandes and his partner Datuk Pahamin A. Rajab in 2001 acquired struggling AirAsia from a Malaysian government-linked entity and transformed it into a dominant carrier in Asia. Fernandes is worth $335 million, according to Forbes.
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