AirAsia airlines may be grouped as one, says Tony

By Violet Ooi

Tony Fernandes

AirAsia is looking to unite its Southeast Asian subsidiaries under one holding company after the introduction of a single Asean aviation market from December 31, 2015, its group CEO Tony Fernandes said.

Speaking at the sidelines of a meeting of Asean business leaders in Kuala Lumpur today, Fernandes said that given the opportunity AirAsia would want to increase its ownership of its Thai, Indonesian and Filipino affiliates to a full 100%.

Bursa-listed AirAsia Bhd along with those three affiliate airlines will come under a holding company which will give investors a true “Asean product,” Fernandes told reporters. Only the holding company would be listed on the stock exchange, he said.

Fernandes will have to wait until after December 31, 2015, when Asean ownership rules are relaxed to carry out his bold plan which will surely spur merger and acquisition activity in the region.

This and others are among the plans AirAsia is exploring to cement its status as a truly Asean Airline. The other is the introduction from January next year of an Asean Pass, which will allow travellers to make as many as 10 flights in a month for a flat fare of RM499.

AirAsia currently holds a 45% equity stake and a 49% equity stake in its two largest affiliates Thai AirAsia and AirAsia Indonesia respectively. The budget airline has operating affiliates in Thailand, Indonesia, Philippines, India and from next year, Japan.

Current airline ownership rules in Asean dictate that foreign ownership of airlines should not exceed 49%.

Once the Asean Economic Community comes into effect from December 31, 2015, ownership rules between Asean countries would be relaxed, allowing Asean companies to own up to 70% of any other Asean company. Depending on the country, this could be further relaxed to a full 100%.

Fernandes said that the move to combine AirAsia Bhd and its Thai, Indonesian and Filipino affiliates under one company is a move to “unite everyone.” He also said “AirAsia Indonesia, for instance, might prefer to be under a holding company.”