KUALA LUMPUR (Oct 31): AirAsia X Bhd (AAX), the medium haul, low-cost affiliate of Capital A Bhd, on Monday (Oct 31) announced the resignation of Tan Sri Tony Fernandes as its acting group chief executive officer with immediate effect, almost four months after he was appointed to the post.
His resignation was “due to other commitments”, according to the budget airline’s filing to the local exchange.
“Tony Fernandes, who was recently appointed as the acting group CEO, in addition to his position as a non-independent non-executive director of AAX in July this year, will be stepping down from his senior leadership positions with AAX, ensuring a smooth transition in leadership. Tunku Datuk Mahmood Fawzy will be appointed as the independent non-executive director of Thai AirAsia X (Thai AAX), both effective as of today,” AirAsia said in a statement later in the evening.
AAX said the two latest key changes in its senior management team was to prepare the group for its next phase of growth as a mid-range airline, besides ensuring a smooth transition in leadership.
Fernandes, 58, was first appointed as AAX acting group CEO, as well as its non-independent non-executive director on July 8, following the resignation of Nadda Buranasiri as the group CEO in April, who had quit his post as CEO of Thai AAX.
The group then updated two weeks ago in an amended announcement to Bursa Malaysia on Oct 14 that Fernandes had also been redesignated as a non-independent executive director.
Fernandes’ resignation came just days after AAX announced it was in the midst of formulating a comprehensive proposed plan to regularise its Practice Note 17 (PN17) condition.
This follows the lapse of an extension of time granted by Bursa Securities on Oct 26 for AAX to complete the implementation of its corporate exercises announced in May last year, which entail the raising of up to RM116 million via a one-for-one rights offering, together with a special issuance to raise RM50 million.
AAX triggered the criteria for PN17 classification last October, after its external auditors, Messrs Ernst & Young PLT, had expressed a disclaimer of opinion on the airline’s audited financial statements for the 18-month financial period ended June 30, 2021.
According to AAX, Mahmood Fawzy will focus on overseeing the strategic direction and driving sustainable growth for AAX and Thai AAX.
Mahmood Fawzy was redesignated as AAX chairman on Aug 1, succeeding Tan Sri Rafidah Aziz, who stepped down a month earlier from the position that she held since the airline’s 2013 listing.
“I am thrilled to join the Thai AAX board of directors as the group embarks on our new phase of growth as a predominantly mid-range airline. Our strategy is to focus on flying our most popular and profitable medium haul routes first, which have proven to be successful in the past including leveraging cargo operations in key markets,” said Mahmood Fawzy.
“AAX group is reborn and rebounding fast, thanks to strong pent up demand for affordable mid-range travel across Asia and Asia Pacific. The resurgence in AAX and Thai AAX as leading low-cost carriers in the mid-range category, would not have been possible without the outstanding leadership and support from Tony as acting group CEO. In just a short period of six months, AAX has already increased its cash flow by over 100% compared to when it restarted in April, with robust plans to continue this positive trajectory moving forward,” he added.
To cater to the “overwhelming consumer demand”, Mahmood Fawzy said the AAX group has added a significant number of new services for both Malaysia based AAX (D7) and Thailand based TAAX (XJ), “with many more in the pipeline”.
Fernandes, meanwhile, said the group has now improved its cost structure, and created the cargo business, which has contributed about 20% to the airline’s revenue during the pandemic and will continue to play a vital role in the recovery of AAX.
“I went in with a clear mandate to restart AAX and bring it back to life from hibernation. I am happy that this has been accomplished with a very edifying plan for 20 aircraft for the AAX group — 13 aircraft for AAX and seven for Thai AAX.
“I’m now going to focus on delivering significant value to shareholders of Capital A, including the AirAsia Aviation Group, aviation services, logistics, travel, fintech and the e-commerce lifestyle platform,” added Fernandes.
AAX shares, which finished unchanged at 39.5 sen, are down 39.23% year to date. The airline’s market capitalisation now stands at RM161.8 million.