SEPANG - AirAsia Bhd does not intend to divest its long-haul, low-cost affiliate AirAsia X Bhd (AAX) in the near term, although it is looking at monetising its investment assets, said executive chairman Datuk Kamarudin Meranun.

“It’s not on the table as far as AirAsia is concerned,” he told a press conference after AAX’s AGM here yesterday.

He said AAX is a core asset of AirAsia, which in fact weighs more than its aircraft leasing company that had received an offer of US$1 billion (RM4.1 billion).

On Monday, AirAsia group CEO Tan Sri Tony Fernandes said AirAsia will eventually monetise all its investment assets, including AAX.

“If it’s a strategic investment, you wouldn’t want to sell it, right? But then again, it’s an investment that you can monetise,” said Kamarudin.

He explained that AirAsia’s assets like its academy, the aircraft leasing company, insurance business and AAX are all possible monetisation avenues that could enhance the value of AirAsia.

“But at the moment, there is no plan to disengage with AAX. On the contrary, there is a lot more cohesiveness between AirAsia and AAX. One of the reasons why I’ve gone to become group CEO of AAX is to make sure the two companies are blending well. So why would we want to divest?”

Kamarudin said AirAsia has been around for 16 years, while AAX just started for about nine years.

“There’s a lot of skeptism on the model. We’ve gone out there and we persisted. It’s still early but I believe it has turned around and hopefully if we can sustain AAX, we will go out to prove that this model really works. Why it works is because we have a strong feeder network in AirAsia. There is so much value in AAX and there is no reason to dispose the shares,” said Kamarudin.

AAX is positive on its performance for the second quarter ending June 30, 2016 (Q2), which is normally the most challenging quarter for the budget carrier.

He said it has put up a tough budget for AAX and the company is able to meet the budget.

“The forward numbers look great,” Kamarudin said, reiterating that it is optimistic of a turnaround for AAX in FY16.

AAX reported a second quarter of profit in the first quarter ended March 31, 2016, posting a net profit of RM179.49 million and revenue RM970.67 million.

Meanwhile, AAX is going to add another one or two more China routes, pending regulatory approvals. It will also focus on the current routes that it has in China, such as Beijing, Shanghai and Chengdu that are doing well and increase those frequencies. - Sundaily

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