KUALA LUMPUR: CAPITAL A Bhd needs up to 50 new wide-body aircraft to turn AirAsia and its long-haul carrier arm AirAsia X Bhd into a low-cost version of world-renowned Qatar Airways and Emirates.
The Middle Eastern airlines have done a great job at making the world a smaller place and Malaysia has the potential to do the same, Capital A chief executive officer Tan Sri Tony Fernandes said.
"Geographically, they're well positioned to do that. They're almost in the centre of the world. But we're also at the centre of the world. There's no reason why we can't do what the Middle East airlines have done," he told Business Times in an exclusive interview yesterday.
Fernandes said the next step for AirAsia as an airline was to grow its fleet from 200 aircraft to 300 so it could fly to untapped destinations like Kazakhstan, Africa, Europe and Latin America.
Currently, the low-cost carrier is talking to Airbus SE and Boeing Company — both rival aircraft manufacturers from Europe and the United States — to procure either the Airbus A330, A350 or Boeing 787.
"We reached a stage where we don't necessarily need to be a single source operator. There are different types of routes. Would I operate three different aircraft to America? No, but I could operate Boeing (for example)."
"It's a big step. For me, to be talking about an aircraft order (today) is pretty spectacular because at this time last year, we were like 'are we going to survive?' Fernandes said, adding that the announcement on the new planes would be made either by year-end or early next year.
AirAsia's target is to have all of its 200 planes back into operations by year-end. Currently, the airline has taken 175 of its aircraft out of storage and expects to fly 180 planes by the end of this quarter.
On Capital A's Practice Note 17 (PN17) status in Bursa Malaysia, Fernandes said the company was on target to submit its regularisation plan by Oct 7.
He said a lot of work had been put into the regularisation plan, but ultimately, it was Bursa that would make the final decision.
"Doing a regularisation is massive and not many companies come out of PN17. I know now why… A lot of work has gone into this. Bursa Malaysia is there to help companies come out of PN17, but ultimately, it's their decision," he added.
The plan for Capital A is to get out of the PN17 status and focus on adding value to five of its subsidiaries, which includes airasia MOVE (formerly known as AirAsia SuperApp), Teleport, Asia Digital Engineering (ADE) and airasia brand co. — a new entity to expand the AirAsia brand worldwide.
The four companies — except airasia brand co. — are growing and ready to move on to the next step, which includes being listed in Bursa Malaysia.
"We can do a lot of things either by breaking (the companies) up; list everything individually; list (the companies) together, or list one or two (companies) together. That's up to the board to decide."
"Step one — my job is to create something of value, not just the airline. Step two is to get out of the PN17 (status) and step three, which kind of runs with step two, is how do we extract the most value (from these companies)?" Fernandes said.
airasia MOVE has been profitable for five consecutive periods, with its latest financial result ending June 30 seeing revenue climbing 107 per cent year-on-year to RM170 million, besides earnings before interest, taxes, depreciation and amortisation of RM39.7 million.
When asked if the travel and lifestyle platform would be profitable this year, Fernandes said he looked forward to it and if it did, it would be one of the first online e-commerce businesses in Southeast Asia to register a profit.
Its rival Grab has yet to turn profitable despite having over 32 million monthly users and an expected revenue of US$2.2 billion this year.
"One of the differences (between airasia MOVE and Grab) is that Grab has to go and get customers. We already have 50 million customers. Since they're flying with us, why don't they take a car ride with us? Why don't they buy food from us?" Fernandes said.