AirAsia converts 36 of its A321neo orders to A321LRs, awaits Bursa's nod over merger

NST Thu, Feb 22, 2024 08:24pm - 1 month View Original

SEPANG: Capital A Bhd's airline unit AirAsia Bhd has converted 36 of its A321neo (new engine option) orders to A321LR (long-range) as it aims to merge its short-haul and long-haul divisions into one global network. 

The company's chief executive officer (CEO) Tan Sri Tony Fernandes said the decision to change the aircraft type is so that AirAsia could have more flying range to connect the Southeast Asia region to Africa, Europe and America. 

"It's traditionally never been done by low-cost carriers but we believe now that with the aircraft that Airbus has given us – the A321, A321LR, A330neo and soon to come the A321XLR (extra long-range), we can build the first global network carrier and connect the world with low fares through our hubs in Kuala Lumpur, Bangkok and Jakarta," he said.

Tony added that the A321LR aircraft is slated to be delivered starting 2025.

He was speaking to the media during Airbus' leadership visit to AirAsia's corporate headquarters here today. Also present was Airbus CEO of commercial aircraft business Christian Scherer. 

The current order book (after the aircraft type conversion) for AirAsia Aviation Group Ltd (AAGL) – an umbrella company for AirAsia and its subsidiaries in Thailand, Indonesia, the Philippines and Cambodia – and AirAsia X Bhd including its Thailand and Indonesia units stood at 647. 

Of the 647 airplanes, 326 are A321neos, 36 A321LRs and 15 A330neos, 20 A321XLR (extra long-range) and 250 aircraft comprises of A320s, A321neos and A330ceos (current engine option) which were delivered from 2005.

Scherer said Airbus has been working together with AirAsia for over 20 years and has commended the entrepreneurial spirit and courage of the budget carrier to develop a brand that has a worldwide reach. 

"We're an airplane manufacturer. We pride ourselves on being an airplane manufacturer that brings a lot of innovations, driven first and foremost by safety and also efficiency, passenger comfort to the marketplace."

"We're really happy that AirAsia has embraced those values and transforming them into connectivity and profits," he added. 

On the sale of Capital A's aviation business to AirAsia X, Fernandes said the company has applied to Bursa Malaysia Securities Bhd for the approval of the transaction.

At the same time, AirAsia X and Capital A are negotiating the sales and purchase (S&P) agreement.

"The stages would be approval from the stock exchange, S&P signed, shareholders' approval, court and raising capital. To do this plan, we also need to raise capital.

"The beauty of this (merger) is that we don't need AirAsia X anymore. It'll just be one brand. To be fair, it's moving. It's off the aero-bridge. It's moving towards the runway," Fernandes said.

On Jan 8, Fernandes announced the sale of Capital A's aviation business that would see AirAsia X merging with AirAsia and AAGL.

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