AirAsia Group in talks to raise $600mn, mulls Japan exit

AirAsia Group is in talks with private equity firms and both local and international conglomerates and banks in efforts to raise MYR2.5 billion ringgit (USD600 million) by the end of the year, chief executive Tony Fernandes told Reuters in an interview on September 7. The AirAsia and AirAsia X parent, which besides Malaysia operates subsidiaries in India, Indonesia, Japan, the Philippines, and Thailand, could raise up to MYR1.5 billion (USD360 million) from bank loans and a further MYR1 billion (USD240 million) from investors and strategic partners, he said. “It’s progressing quite well, and I see no reason why that won’t be met. But I can’t add too much more to that,” he said. AirAsia Group is also reviewing its AirAsia Japan (DJ, Nagoya Chubu) business, Fernandes confirmed, but its AirAsia India (I5, Chennai) joint venture with Tata Sons will remain unchanged. “I think Japan is something we have to really think hard about. If we had tonnes of cash, then it’s something we would probably continue. I think we will have decisions on Japan very soon,” he said without elaborating. The group intends to consolidate and strengthen its Association of Southeast Asian Nations (ASEAN) foothold, Fernandes said, “and if that means one day exiting India and Japan then so be it.” As previously reported, AirAsia Japan chief operating officer Jun Aida insisted in an interview with Nikkei last month that AirAsia Group was not considering a withdrawal from that country, arguing that it had invested too much in its Japanese business to pull out. The Japanese LCC, which AirAsia Group 49% owns, initially commenced operations as a joint venture with ANA – All Nippon Airways in 2012 before AirAsia left the following year and operations ceased. The group later returned to the market and after several delays AirAsia Japan reappeared in its current guise in 2017.