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Planes are full, airfares are high – and Malaysia’s AirAsia has never been more excited

  • With Southeast Asian aviation in a ‘purple patch’, the carrier is set to witness its ‘best-ever period’, founder Tony Fernandes said
  • The airline executive said he’d ‘never been this bullish’ as he eyes a bumper couple of years, hailing ‘a renaissance period of sensible economics’

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AirAsia planes are seen on the tarmac at Kuala Lumpur International Airport on Monday. The airline’s founder said he expects 2024 to be ‘very good’ for his companies and 2025 to be ‘amazing’. Photo: Reuters
Bloomberg

The aviation industry is experiencing a “purple patch”, with demand for seats far outstripping capacity amid a long wait for new aircraft and a shortage of pilots further discouraging any fresh competition, said Tony Fernandes, the founder of low-cost carrier AirAsia.

Malaysia-based AirAsia for its part is set to witness its “best-ever period” with most of the carrier’s 240 planes back in the sky and “airfares at their best”, Fernandes said during an interview near Kuala Lumpur’s international airport on Monday.

“I’ve never been this bullish before,” said Fernandes, who started AirAsia 23 years ago. “Southeast Asia is going through a renaissance period of sensible economics, and that’s a good thing.”

Tony Fernandes, AirAsia founder and CEO of the airline’s parent company, Capital A, poses for a picture in Sepang, Malaysia, on Monday. Photo: Reuters
Tony Fernandes, AirAsia founder and CEO of the airline’s parent company, Capital A, poses for a picture in Sepang, Malaysia, on Monday. Photo: Reuters
On the back of that, AirAsia plans to raise as much as US$600 million in coming months, Fernandes said, as he tries to pull off a merger between his two aviation businesses – long-haul carrier AirAsia X and short-haul airline AirAsia, which is currently a unit under Fernandes’ more diversified company Capital A Bhd.

Following the merger, which is expected to conclude midyear, the new entity will look to raise up to US$400 million via selling equity, Fernandes said. Citigroup and US advisory bank Evercore have been appointed to lead the capital raising. A US$200 million revenue bond, securitised against revenue from new routes, is also expected to be finalised soon, he said.

Fernandes said the merger of the two airlines will create a new firm called AirAsia Group that will subsequently take over AirAsia X’s listing on Bursa Malaysia. The company may also do away with its AirAsia X branding as the aviation businesses consolidate.

AirAsia has ambitions to expand its footprint from a predominately Asian airline to a global low-cost carrier with a more extensive network. It plans to start flying to Kazakhstan, its first route in Central Asia, later this year.

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