AirAsia CEO Fernandes looking at China joint venture: CNBC
17 August 2016
Tony Fernandes, chief executive officer of no-frills airline AirAsia Group, said his airline is now looking to set up a joint venture in China to tap into the booming travel industry in the world's second-largest economy.
Fernandes told CNBC in an interview that he would love to have a joint venture in China, adding that several interested parties have approached the Malaysia-based airline. He, however, said, it was too early to decide on the right partner.
"I believe there is a strong chance of that happening so we have to wait and see," CNBC quoted Fernandes.
Developing the China business would be more than just ferrying Chinese tourists, he noted.
"Everyone looks at just bringing the Chinese out, but we have a dual market where a lot of Southeast Asians are going out to China," Fernandes said.
AirAsia currently flies to 15 Chinese destinations, including secondary and tertiary cities. China contributed nearly 19 per cent to the budget carrier's 2015 revenue, according to its chief executive.
Fernandes said AirAsia wouldn't necessarily be looking at China's largest cities, rather it is looking at opening up the market.
"We are not interested in developing what has already been developed...what we have been good at is developing new markets, new traffic, and opening up different parts of China," he added.
Besides, AirAsia is planning new listing in Hong Kong as it expands into North Asia, according to a Reuters report in July.
"A consolidated AirAsia where we own 100 per cent of all the airlines, can be moved forward through a different listing," Fernandes told CNBC.
He said the aim is for "a simple airline," which might also include selling the ancillary businesses.
"I want to simplify the business, simplify the accounts on the consolidation aspect, so analysts and everyone else can understand it," he said.
"The stock market is not giving us any value for what I call my non-core businesses ... if you add all those businesses up, it's about 5.5 billion ringgit ($1.37 billion) in value," he said.
AirAsia, meanwhile, is expected to post stronger revenue and net earnings, on the back of strong operating statistics and cheaper jet fuel prices, according to analysts.