Published on : Thursday, October 8, 2015
AirAsia amid a number of challenges in the present year is probably looking to go private as per the recent speculation going around in the Asian airline industry. The co-founder of the airline, Tony Fernandes and his long-time business partner Datuk Kamarudin Meranun are reportedly in conversation with banks.
Although there are no official statements from AirAsia, press sources have revealed that the depreciation of Malaysian ringgit (went down by 20% this year) along with other challenges in the airline industry is making it almost inevitable for the airline to go private. Moreover, the rising value of US dollars is hurting the costs of the airline as well.
Despite this, Fernandes has been vocal in his belief that the market is undervaluing his airline, last estimated at 3.5 billion ringgit ($803m) in June after falling 40 per cent in value following the GMT Research report.
Fernandes has also said he remains hopeful that reduced fuel costs and a downsizing in operations from main rival Malaysian Airlines will help drive an improvement in AirAsia and return it to profitability.
Whether the markets share the optimism of Fernandes in restoring the airline’s fortunes remains to be seen, a move to privatize AirAsia could be the shot in the arm required.
Tags: airasia, Airline News
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