AirAsia says leasing unit deal should be finalised by March

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KUALA LUMPUR (Dec 13): AirAsia Bhd hopes to reach a deal on the sale of its aircraft leasing unit by March, its group chief executive said on Wednesday, as the budget carrier seeks funds to return to shareholders.

Tan Sri Tony Fernandes, who built AirAsia into the region's biggest budget airline from a two-plane operation a decade ago, has been looking to sell stakes in non-flying businesses to pay special dividends.

Talks have been underway for more than a year to sell a stake in the leasing unit, in a deal sources have valued at around US$900 million. Fernandes has said he would prefer AirAsia to keep a stake in the business rather than sell it entirely.

"Can't give you date, but it's moving very well. I hope it will be completed within this financial year (ending March 2018). I am very optimistic," Fernandes said at a news conference.

In October, Fernandes said the leasing unit was likely to be sold by the end of December.

The budget carrier has also been looking for ways to boost revenue.

Fernandes, AirAsia's co-founder, last month said the airline was testing personalised baggage pricing and launching a travel money card, targeting a 22% rise in revenue per passenger from add-ons by the end of 2018.

On Wednesday, he appointed Riad Asmat as chief executive of the airline's Malaysia-based operations, as part of a series of management changes. Riad will assume the post on Jan. 10.

Aireen Omar, currently chief executive of AirAsia Bhd, will become deputy group chief executive for digital transformation and corporate services, the airline said.

Fernandes also said AirAsia will add 30 aircraft next year across the group, which includes offshoots in Indonesia, Thailand, the Philippines, India and Japan.

"That would be about a 13-14% capacity we are adding," he said.

The group is planning to add 12 aircraft to its fleet through operating leases in the fourth quarter.

AirAsia shares were up 1.3% in afternoon trade versus a 0.4% rise in the benchmark share price index.