AirAsia Revives Plan to Buy Private Jet Used by Fernandes and Meranun

17th Mar 2017

Malaysian budget carrier AirAsia said on Thursday in a filing to Bursa Malaysia that it had inked a deal with charter provider Caterham Jet Global (CJG) to buy a Bombardier BD-700-1A10 jet for RM44.4 million ($10 million). This is the same private jet used by AirAsia Group Chief Executive Officer Tony Fernandes and AirAsia Bhd Executive Chairman Kamarudin Meranun.

In the announcement, AirAsia said the charter provider is looking to sell the jet. This means, if AirAsia doesn’t buy it, its Group CEO and Executive Chairman will no longer be able to use it for travel.  

AirAsia signed a charter agreement with CJG on April 2015, which allows its group CEO and executive chairman to use the jet until 30th June, 2017. The CJG initially charged an annual fee of RM13.3 million ($3 million), but as of 31st March, last year, the CJG has increased the fee to RM25.5 million ($5.75 million) after AirAsia board approved its request to do this. In its request, CJG stated rising operating costs as the reason for this.

CJG bought the aircraft in July, 2012 for $24 million and had it refurbished for $0.7 in the following year.

AirAsia tried to acquire the jet last year in June and had the agreement sealed, but it never came to life as the two parties couldn’t agree on some things.

If it manages to acquire the jet, AirAsia said in a statement, it will transfer it over to a newly-formed subsidiary and register it in its name. The subsidiary will then have the choice of operating the aircraft under a private category or to sign a charter agreement with another aircraft operator certificate (AOC) holder.

In a statement about this, AirAsia said:

The subsidiary is contemplating to apply for a charter AOC from the Department of Civil Aviation Malaysia to operate as a full-fledged charter and private unscheduled business jet operator.

The aircraft in question was manufactured in 1997.

Caterham Jet Global is owned by Fernandes and Kamarudin, who are also major shareholders in the Malaysian airline with 32.2 per cent stake each.

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