Tony Fernandes, chief executive officer of Capital A.
Chris Ratcliffe | Bloomberg | Getty Images
Despite soaring oil prices and weakening currencies, the outlook for aviation stays positive attributable to “extremely strong” demand, said Tony Fernandes, CEO of AirAsia parent company Capital A.
“We’re trying to add 20 more aircraft to the fleet for the primary time in a protracted, very long time even before Covid,” he told CNBC’s “Squawk Box Asia” on Friday.Â
What can be a “problem,” nevertheless, is getting the aviation group’s fleet back out of maintenance, Fernandes added.
“In AirAsia we’ve got 205 aircrafts and in AirAsia X we’ve got about 20 aircrafts … getting slots and clearly getting them ready for service has been a giant challenge.”Â
The positive outlook comes regardless of negative market reactions to Fernandes’ resignation as AirAsia X’s Group CEO this week. AirAsia X is the long-haul budget flight arm of AirAsia.Â
AirAsia X shares dropped after the Oct. 31 announcement, and losses for the reason that development still stood at about 5% as of Friday morning.
“Unfortunately, whatever I do gets blown out of proportion. I went in there [AirAsia X] for a brief period … I just went in there to kickstart an airline that will have been heavily restructured and was in hibernation,” Fernandes said.Â
Unlocking ‘real value’ of Capital AÂ
AirAsia X slipped into PN17 status in October 2021, a designation issued by Bursa Malaysia to financially distressed firms. These firms may be delisted, should their financial position fail to enhance.Â
“I feel we’re coming out of PN17. While I used to be very against it, I believed it was harsh to place us into PN17 … actually we have turned a negative into positive.”
In his four-month tenure, Fernandes created a cargo business in AirAsia X, which he said has contributed “about 20% to the airline’s revenue throughout the pandemic” and can proceed to play an important role in its recovery.Â
He added that AirAsia X now has “very strong footing” and higher cost structure.
Fernandes told CNBC that he’s now specializing in the larger Capital A bunch and “unlocking its real value.”
He added that there shall be a newly formed holding company “very soon,” which might contain all aviation services, including its engineering company Asia Digital Engineering, restaurant brand Santan and its consulting arm.Â
“My job now could be to ensure we deliver profitability, good money flow growth, have the appropriate funding on all of those and from where we were … the sky looks really good,” Fernandes said.Â
E-commerce provides ‘huge opportunity’Â
Whilst the economy tightens, Fernandes said he’s “not fearful” as Capital A will profit as a “value provider.”Â
“I have been through many slowdowns within the economy and folks will go to the best-value operator,” he added.Â
As well as, the pandemic has provided an enormous opportunity with the boom in e-commerce, which Fernandes said is here to remain.
“Even in logistics, it’s a beautiful time for us to grow. For the primary time in our history, we have taken three cargo planes.”Â
He added: “It still takes a protracted time to ship products even from Kuala Lumpur to Singapore. [At] AirAsia, we do it in a day now. And so we’ll do point-to-point logistics, change the entire model, and we see an enormous opportunity for us.”
