(Updated)

Capital A optimistic about exiting PN17 status by year end, says Fernandes

Photo by Shahrin Yahya/The Edge

Photo by Shahrin Yahya/The Edge

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KUALA LUMPUR (Jan 12): Capital A Bhd is optimistic about its potential growth this year, following a strong rebound in travel demand post Covid, and expects to be out of Practice Note 17 (PN17) status by the end of this year, said chief executive officer Tan Sri Tony Fernandes.

He said the investment holding group, which is involved in aviation, logistics, lifestyle, and financial services ventures, plans to submit its finalised regularisation plan to Bursa Malaysia as early as February.

“We can be out of PN17 status, definitely this year, and I hope much earlier than that. All of the consultants are now going through all the work. 

“We hope to submit to Bursa somewhere between February and April. Once we get the approval, then we will go through it,” he told reporters on the sidelines of the airasia Super App rider and driver appreciation event here on Thursday (Jan 12).

To recap, Capital A fell into the PN17 list of Bursa Securities, a categorisation for distressed entities, in January 2022. 

The group previously announced that there was no plan for a merger between its two airline entities, AirAsia Bhd and AirAsia X Bhd (AAX), but a separate publicly-quoted aviation group would be formed under the proposed PN17 exit strategy.

Commenting on travel demand, especially from China following the reopening of its borders, Fernandes said the group anticipates a very strong recovery for the market in view of the overwhelming demand it had received from Chinese tourists. 

“We have not started selling in full because we're applying for all the rights...but we have applied for 19 destinations [compared with about] 24 destinations we had pre-Covid.

“The demand is there. Obviously, flights are very expensive going abroad, so we think many people will come to Southeast Asia,” he said.

He hopes governments do not overreact to the latest Covid-19 variants as they are less dangerous, saying that like everywhere else, the surge in China will likely be over soon.

Fernandes said his main focus currently is getting all the planes to fly again, and expects it to be on a par with pre-Covid levels by July for all markets, and not just China. 

He said the airline business would be running with 204 planes by May, compared with 150 planes currently, and there will be no new delivery taking place this year, while 50 new deliveries are expected in 2024.

“People have to understand that it's taking a little bit of time for airlines to get back, but we're working very hard. We're listening to the people…the issues with AirAsia [regarding] its time performance...I think that's going to be solved. For refunds, I think that's almost all solved now.

“It all looks positive, but there's a lot of things still that we have to work on, such as the oil price that is still very high, and the ringgit versus the US dollar, but demand is very strong, and so I believe 2023 will be an important year for us in getting back to where we were,” he said.

He added that AAX would be operating with 14 planes by end-2023, versus eight at present.

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