According to AirAsia Chief Executive Officer Aireen Omar, the Malaysian budget carrier is close to completing the stake sale process for its aircraft leasing arm Asia Aviation Capital by the end of this year.
Aireen didn’t reveal the exact date when the sale will happen, but said:
It is something we hoped to close very, very soon. I can safely say at least by end of the year.
The biggest budget airline in Asia appointed BNP Parias, Credit Suisse and RHB Investment Bank to advise on a part sale of a “substantial” stake in its aircraft leasing arm, or a full stake in it. Proceeds from the sale should then be distributed to AirAsia shareholders as dividends or they will be used to cut down the carrier’s debt.
AirAsia established Asia Aviation Capital in September 2014 as a way to oversee and offer aircraft leasing arrangements for AirAsia and its Thailand, Indonesia and Philippines affiliates. By the end of the previous year, the leasing arm has already leased as much as 63 planes to associates and 3rd-party carriers.
According to Aireen, the airline’s load factor should remain at about 90% in 2017, thanks to travel demand. She said:
It has been around 90% and we expect it to be high 80s or low 90s. This is an indication that we would be flying more people with more frequency and connectivity.
Aireen also said that AirAsia plans to increase its ancillary income from 50 ringgit per person in the first quarter of 2017 to 60 ringgit per person in the “immediate future”. She added:
Ancillary income could be more than 20% of the total group's revenue.
The carrier will also start flying up to six new routes with its Malaysian operations to increase connectivity in the region, said Aireen, who also noted that 70% of these new routes would probably be international.
According to the United States plane manufacturer Boeing, Southeast Asia will need as much as 3,750 new aircraft to meet demand in the next two decades and air travel in the entire continent is growing every year.
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