AirAsia parent Capital A faces scrutiny over recovery plan
"I thought COVID-19 was just going to be a passing cloud, but I was wrong," says Tony Fernandes. The larger-than-life executive behind AirAsia, the Malaysian budget airline whose parent company now goes by the name Capital A, was in a reflective mood in a recent interview with Nikkei Asia. He confessed he'd assumed the coronavirus would pass as quickly as other health emergencies, like SARS or H1N1. "I actually have to apologize to my communication team because I said, why are you making such a big deal out of this and scaring people? I thought I had seen everything in 20 years. But obviously the pandemic is a global phenomenon that I never imagined [would] be how it is today." Under Fernandes, 58, AirAsia has snatched a significant share of the Asian market from premium carriers like Malaysia Airlines and Indonesia's Garuda, and it flew over 50m passengers in 2019 before the pandemic hit. But now it finds itself at perhaps its lowest point. Over 200 aircraft from a fleet of 260 planes have remained idle for most of the last two years. Annual results for 2021, expected next week, will show a cash outflow of 1.4b ringgit ($333m), according to an estimate from Nomura. Amid all this, Fernandes has pursued a frenetic expansion of the company into new businesses such as food delivery and a digital wallet, with ambition to build a full-blown "superapp" to rival Grab and GoTo. It is a strategy that entails heavy investment. Losses on those digital businesses in the third quarter last year almost added up to the loss in the core airline business. Capital A has pursued a frenetic expansion into new businesses such as food delivery and a digital wallet, with ambition to build a full-blown "superapp." (Photos by AirAsia) Last month, the Bursa Malaysia stock exchange raised a red flag over Capital A's finances, putting it under "Practice Note 17," which demands that it conduct a financial restructuring within a year or face automatic delisting. The shares fell 25% on the day the bourse made the announcement, and although the stock has recovered some ground since, at 62 sen this week it is a far cry from the 4.60 ringgit all-time high recorded on March 1, 2018. Story has more.<br/>
https://portal.staralliance.com/cms/news/hot-topics/2022-02-25/unaligned/airasia-parent-capital-a-faces-scrutiny-over-recovery-plan
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AirAsia parent Capital A faces scrutiny over recovery plan
"I thought COVID-19 was just going to be a passing cloud, but I was wrong," says Tony Fernandes. The larger-than-life executive behind AirAsia, the Malaysian budget airline whose parent company now goes by the name Capital A, was in a reflective mood in a recent interview with Nikkei Asia. He confessed he'd assumed the coronavirus would pass as quickly as other health emergencies, like SARS or H1N1. "I actually have to apologize to my communication team because I said, why are you making such a big deal out of this and scaring people? I thought I had seen everything in 20 years. But obviously the pandemic is a global phenomenon that I never imagined [would] be how it is today." Under Fernandes, 58, AirAsia has snatched a significant share of the Asian market from premium carriers like Malaysia Airlines and Indonesia's Garuda, and it flew over 50m passengers in 2019 before the pandemic hit. But now it finds itself at perhaps its lowest point. Over 200 aircraft from a fleet of 260 planes have remained idle for most of the last two years. Annual results for 2021, expected next week, will show a cash outflow of 1.4b ringgit ($333m), according to an estimate from Nomura. Amid all this, Fernandes has pursued a frenetic expansion of the company into new businesses such as food delivery and a digital wallet, with ambition to build a full-blown "superapp" to rival Grab and GoTo. It is a strategy that entails heavy investment. Losses on those digital businesses in the third quarter last year almost added up to the loss in the core airline business. Capital A has pursued a frenetic expansion into new businesses such as food delivery and a digital wallet, with ambition to build a full-blown "superapp." (Photos by AirAsia) Last month, the Bursa Malaysia stock exchange raised a red flag over Capital A's finances, putting it under "Practice Note 17," which demands that it conduct a financial restructuring within a year or face automatic delisting. The shares fell 25% on the day the bourse made the announcement, and although the stock has recovered some ground since, at 62 sen this week it is a far cry from the 4.60 ringgit all-time high recorded on March 1, 2018. Story has more.<br/>
