AirAsia (AK, Kuala Lumpur International) has established its own aircraft leasing subsidiary, Asia Aviation Capital Ltd (AAC), based in Labuan, Malaysia’s only offshore financial hub. A statement issued to the Bursa Malaysia last week said Asia Aviation Capital will focus primarily on acquiring aircraft and securing financing for these aircraft; providing operating leases to AirAsia Group affiliates; managing the portfolio of aircraft including technical services; and remarketing of aircraft leases and/or sale of aircraft.
"The objective of establishing Asia Aviation Capital is to provide aircraft leasing services for the AirAsia Group. AAC will own and manage the portfolio of aircraft that is currently leased to AirAsia’s affiliate companies outside of Malaysia namely, Thai AirAsia (FD, Bangkok Don Mueang), AirAsia India (Bengaluru International), AirAsia Inc., AirAsia Zest (Manila Ninoy Aquino International), Indonesia AirAsia (QZ, Jakarta Soekarno-Hatta) and future affiliates. Aircraft owned and operated in Malaysia will however remain with the Company," the filing read.
According to AirAsia Group founder and CEO, Tony Fernanades, AAC is expected to generate up to USD50million over the next few years with long term projections seeing it earn USD100million in later years. Aside from its supply of aircraft to the AirAsia Group, AAC is also expected to place aircraft in target markets such as China and Africa.
As of September 2014, AirAsia Group's order book consisted of 322 aircraft - fifty-eight A320-200s and 264 A320neos - on order from Airbus.
Fernandes also disclosed that the Group is considering spinning off AAC at some point; a move which is expected to help reduce its growing debt pressure. In an interview with Bloomberg news in Dubai, the CEO said the AirAsia Group is considering offering UAE-based lessor, Dubai Aerospace Enterprise, a substantial stake in the new leasing unit, but offered no hint on timeframes.
