Thursday 28 Mar 2024
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KUALA LUMPUR (Feb 16): Capital A Bhd (formerly known as AirAsia Group Bhd) announced that its unit AirAsia Aviation Group Ltd has entered into a non-binding memorandum of understanding (MoU) with international aircraft leasing company Avolon Aerospace Leasing.

This is to establish a joint working group to study the feasibility of urban air mobility in the ASEAN region and evaluate the possibility of leasing up to 100 VX4 electric vertical take-off and landing (eVTOL) aircraft.

In a bourse filing, Capital A said these eVTOL aircraft, commonly known as drones, will allow Capital A's unit to further revolutionise air travel by providing advanced air mobility to a whole new group of passengers.

It said recent developments in eVTOL technology are creating an exciting new aviation market that could revolutionise urban air mobility.

"The forecast cost per seat of eVTOL [vehicle] is such that it is likely not only to displace the helicopter market, but also democratise urban air mobility, creating what could be a US$1.5 to US$2.9 trillion global market by 2040," it said.

Capital A believes environmental concerns pose an existential threat to aviation, and eVTOLs are an important opportunity for the parties to be early influencers and adopters in the decarbonisation of air transportation.

"Given the combination of population density, demographics, tourist resort landscape, road congestion as well as limited ferry and runway capacity, ASEAN will become a key eVTOL market.

"Avolon has invested in Vertical Aerospace Ltd, through a PIPE (private investment in public equity) funding as part of a de-SPAC (special-purpose acquisition company) that concluded in a listing on the NYSE (New York Stock Exchange) in December 2021. Avolon has also placed an order for up to 500 VX4 aircraft and is the only lessor to have made a commitment in the eVTOL space," it added.

In a separate statement, Capital A chief executive officer Tan Sri Tony Fernandes said innovation has always been in the group's DNA and that using technology to find more efficient and sustainable ways of doing things is a core focus of the group.

"I am truly excited about this partnership between Avolon and AirAsia and the potential for zero-emissions ultra-short-haul air travel in Southeast Asia. The digital era is now. In the VX4, we have identified what we believe will be the eVTOL aircraft of choice and we are thrilled to be the launch airline for the aircraft in Southeast Asia. We are also delighted to extend our long-standing relationship with Avolon, which has a proven track record of delivering for its customers and is in sync with our goal to become the leading one stop travel and delivery platform in ASEAN," he said.

Capital A was classified as a PN17 company after Bursa Malaysia rejected its request to extend the 18-month exemption period which ended on Jan 7.

For the cumulative nine months ended Sept 30, 2021, Capital A narrowed its net loss to RM2.23 billion from RM2.66 billion in the same period of financial year 2020, although its revenue fell to RM1.02 billion from RM2.97 billion.

Capital A shares settled one sen or 1.59% lower at 62 sen, with a market capitalisation of RM2.58 billion. It saw some 16.98 million shares change hands. The stock has declined 23.46% year-to-date from 81 sen.

Edited ByLam Jian Wyn
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