AirAsia X: Listing plan intact but it won’t be this year

AirAsia Group chief executive officer Tan Sri Tony Fernandes dismisses suggestions that AirAsia X will be listed in Singapore.

KUALA LUMPUR: The proposed listing of AirAsia X, the long-haul low-fare affiliate of AirAsia Group, is still intact, AirAsia Group chief executive officer Tan Sri Tony Fernandes said.

"It's progressing and an announcement will be made in due course," Fernandes told reporters after the signing of a letter of intent between AirAsia X and International Lease Finance Corp for the lease of six A330-300 aircraft here yesterday.

He dismissed suggestions that AirAsia X will be listed in Singapore.

"Why should we list there (Singapore)? No. Please don't create something out of nothing," he said in response to a question whether AirAsia X is slated for listing on the stock exchange in Singapore.

He said the listing would not happen this year, adding that the airline needs to look at various factors including market condition.

"Internally, AirAsia X is ready to list. It's just the question of when we press that button. There is a lot of factors to consider," he said.

Fernandes, who is also the co-founder and director of AirAsia X, said AirAsia group is not eyeing any acqusitions at the moment after Batavia Air. "Generally, I'm not a a believer in acquisition. I believe in organic growth. But if the opportunity arises, we will look at it.

"We are focusing on organic growth. It's easier and based on our experience, it taught me that when you have one culture, it would be difficult to get two cultures together.

"It's much easier if you have one culture and build on that. Once in a while when there comes an opportunity like Batavia Air, then we will look at it," he said.

He said AirAsia acquired Batavia Air because the latter has a similar business model as AirAsia.

With Batavia Air for instance, he said AirAsia X can go to a lot more destinations than just Indonesia.

"The marriage of the two models is really going to make each company more earnings accretive and from our perspective, this is fantastic because now we can have much more connectivity.

"And certainly AirAsia X would be keen to have two or three flights to Sydney because there will be less waiting time for passengers who arrived in KLIA and LCCT to go to Bali, Phuket or Langkawi.

"That is the whole model. The plan is to really focus around existing routes that we have and existing countries so that connecting on a short-haul flight or short-haul flight connecting AirAsia X becomes a very simple process.

"It began to see group strategies of two separate companies, which make Kuala Lumpur a very strong hub," he said.

Fernandes also said AirAsia X has no immediate plan to fly back to Europe due to stiff competition from other major airlines.

"I think it's a wiser thing that we ever did. It's showing in the numbers that every airline that is going to Europe is struggling mainly because there are some big elephants called Emirates, Etihad and Qatar.

"It's tough for us to have low-fare and make money at this kind of oil prices," he said.

On the impact of the fluctuating price of crude oil on AirAsia X's operation, Fernandes said the airlines is not really distracted with the situation.

"Whatever the oil price is, AirAsia delivers very good margin. AirAsia X is in that position. Whether the price is at US$100 (RM310) per barrel or US$135 or even US$150, our model is strong," he said.