AirAsia receives $443mn in private financing

AirAsia (AK, Kuala Lumpur International) has locked in dual-tranche private financing of USD443 million to fund refurbishing parked planes and refinance lease liabilities, according to an August 22 statement from majority owner Capital A.

California-headquartered Ares Management Corporation and Singapore-based Indies Capital Partners Pte. Ltd., both alternative investment managers, tipped in USD200 million for the refurbishments, while aircraft lessors have provided the remaining USD243 million to refinance lease liabilities.

According to ch-aviation fleets data, AirAsia currently has 15 aircraft in storage - nine A320-200s and six A320-200Ns. The lessors include Castlelake (three aircraft), Carlyle Aviation Partners (three), Nomura Babcock & Brown (three), Wings Capital Partners (two), CDB Aviation (two), and Macquarie AirFinance (one), plus one unknown lessor.

Among the affiliate airlines, Indonesia AirAsia (QZ, Jakarta Soekarno-Hatta) has four aircraft in storage (one each from Aircastle and ICBC Financial Leasing and two from Aviation Capital Group), Philippines AirAsia (Z2, Manila Ninoy Aquino International) has six aircraft stored (one from Aircastle, two from AerCap, and three from Horizon Aircraft Finance), and Thai AirAsia (FD, Bangkok Don Mueang) has an A320-200 leased from Avolon in storage.

"This revenue bond is timely in strengthening AirAsia's financial position and liquidity," said AirAsia Aviation Group CEO Bo Lingham. "Against a backdrop of growing travel demand, we will use this funding to expand and reactivate our fleet and refinance lease liabilities for a more robust balance sheet. We plan to reactivate ten aircraft in October, with an additional 15 to follow in 2025."

Bloomberg reported that the funding, which is structured as privately-placed bonds linked to revenue, is secured against the sale of future airline tickets.

Evercore Asia (Singapore) Pte. Ltd. acted as the financial adviser to Capital A on this transaction, alongside international legal advisor A&O Shearman and local legal advisor Christopher & Lee Ong.