KUALA LUMPUR (July 5): AirAsia Bhd (AAB), the budget carrier of Practice Note 17 company Capital A Bhd (KL:CAPITALA), has closed a US$12.25 billion (RM51.71 billion) deal for 50 Airbus extra-long-range single-aisle planes.
The order comprises 50 of Airbus’ A321XLR jetliners, Capital A CEO Tan Sri Tony Fernandes announced in a media briefing late on Friday. Attached to the deal are conversion rights for another 20 of the extra-long-range narrowbody jets.
Fernandes noted this comes as the group refocuses on growth as its regularisation plan enters its homestretch.
“This deal shows the confidence we have going forward. We wanted to make sure we had a clear path to restructuring, raising capital and getting all our aircraft back into operation. I think we now feel the worst is over, so we’ve started to plan for growth before we miss this opportunity as slots get taken up,” Fernandes told the press.
First deliveries of the A321XLR planes are slated for 2028, Fernandes noted, but he hopes for earlier delivery, possibly as soon as 2027. Deliveries will continue till 2032.
AirAsia’s fleet — including sister long-haul airline AirAsia X Bhd (KL:AAX) — currently stands at 255 planes, comprising 227 narrowbody and 28 widebody planes.
Behind this lies its existing order backlog of about 360 planes of Airbus’ A320 family of jets. The latest A321XLR deal adds to this tally.
“Nothing’s changed [to the existing orderbook] except for that we have an option to convert 20 of our existing orderbook into A321XLRs, so that would mean 70 A321XLRs [in total],” he said.
“We are discussing with Airbus on the new A330 order, I think that’s 15 aircraft. In due course we will let people know. There is another order we are working on with two aircraft manufacturers for up to 150 aircraft and we think we will know that in the next month,” Fernandes said, noting one of the original equipment manufacturer to be China’s Comac.
In terms of financing the new A321XLR order, Fernandes said AirAsia is going into the bond market, as well as looking at the capital market and export credit agency-backed financing.
“Two international rating agencies are working with us right now. We hope to have our first bond in place by October,” he noted.
The deal comes as Capital A looks to complete its financial regularisation plan to exit its PN17 status. It fell into the financially distressed category of entities in January 2022.
A key cog of its regularisation plan is its aviation business restructuring deal, which involves AAX buying AirAsia Aviation Group Ltd (AAAGL) for RM3 billion and AAB from Capital A for RM3.8 billion. The AAB disposal sees AAX assuming RM3.8 billion worth of debt Capital A owes AAB.
AAAGL operates passenger airline services via units in Thailand, Indonesia, the Philippines and Cambodia.
As at end-March, Capital A had total borrowings of RM1.47 billion.
Another RM4.14 billion in borrowings, RM16.69 billion in lease liabilities and other liabilities were listed under liabilities associated with disposal groups.
On Capital A’s regularisation plan, Fernandes said it’s “almost done”, and currently pending the Stock Exchange of Thailand’s approval of the aviation business disposal.
“We have the Thai Stock Exchange to get approved. We have our [RM1] billion of capital, and now we have all our consent letters [from creditors], so now we are confident to take that next stage in regrowing AirAsia,” he said.
Shares in Capital A ended one sen or 1.18% lower at 84 sen on Friday, valuing the group at RM3.62 billion.
AAX shares closed unchanged at RM1.62, giving the company a market capitalisation of RM724.26 million.