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AirAsia’s announcement of a long-haul expansion strategy at a time when its short-haul operation is undergoing rapid growth requiring
significant investment is an “inspired” strategy, according to a new report from the Centre for Asia Pacific Aviation.
The report, published today, argues that AirAsia is “probably not
extending itself too far financially. It could simply be making itself so attractive to potential investors in this phase of market development
that it will drive up its potential value for investors.”
The Centre’s Executive Chairman, Peter Harbison, stated, “the Asian market is a fertile breeding ground for investor opportunities, with
equal doses of liberalisation and new travellers opening up massive traffic expansion opportunities. AirAsia has the attractions of a large
and expanding market share, the lowest airline costs in the world, a brand name to die for - and unquestionable recent
profitability.”
The report
suggests there is a likelihood that strategists in several investment groups would be looking at how a deal involving AirAsia
could be structured.
“If there’s one thing that the TPG/Macquarie/Allco bid for Qantas has done, it is to make it clear that airlines in this region are in play for the
equity investors. The equity hounds are baying and the whole jungle is
listening,” said Mr Harbison.
According to the report, AirAsia X is to be a separate company with its own management – a perfect vehicle for investors.
“So there is at least one more shoe to drop. Who will be making the investment in the second Malaysian flag carrier? And how long will it
be before further “strategic” moves are made on AirAsia itself? An eventual IPO of AirAsia X is one option, but watch this
space,” added Mr Harbison.
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