AirAsia gets S$1.38b offer for leasing firm

HONG KONG — AirAsia, the region’s biggest low-cost carrier, has received an offer valued at about US$1 billion (S$1.38 billion) to buy its aircraft leasing firm amid a surge in the business in the continent, said CEO Tony Fernandes yesterday, sending the group’s shares to the highest level in more than a year.

“We actually had an offer to buy it and I think this is a very powerful cash generator. At some point, we will divest this asset. There’s tremendous value and cash equation there,” said Mr Fernandes. The offer for Asia Aviation Capital, the leasing company fully owned by Kuala Lumpur-based AirAsia, needs to be discussed further with the group’s board, he added, declining to offer further details.

Mr Fernandes’ comments come as Singapore-based BOC Aviation,Asia’s biggest lessor, is slated to start trading in Hong Kong tomorrow after a HK$8.7 billion (S$1.55 billion) initial public offering. AirAsia shares gained as much as 4.2 per cent to RM2.50 (S$0.83), the highest intraday price since March 2015 in Kuala Lumpur yesterday, before shaving gains to close up 0.4 per cent at RM2.41. AirAsia’s shares have jumped 86.8 per cent this year, lifted by a surge in profits.

“It was interesting that we haven’t even gone to the market and someone approached us on it, because obviously we have some very valuable assets in our A320s and a very strong order book,” said Mr Fernandes.

As airlines serving the Asia-Pacific region move to triple their fleet, they are finding it can be cheaper to lease jets instead of buying them from manufacturers Boeing or Airbus. AirAsia, one of the biggest customers of Airbus’ single-aisle A320 jets, started the leasing firm in 2014. The unit had 43 A320s in its fleet at the end of March. BLOOMBERG