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ADJACENCY
BUSINESSES
ESTABLISHED AS A WHOLLY-OWNED LEASING
ARM OF AIRASIA BERHAD IN 2014 TO SERVE
PRIMARILY THE GROUP, AACL QUICKLY
EVOLVED, EXPANDING BOTH ITS FLEET AS
WELL AS NETWORK OF CUSTOMERS TO
INCLUDE THIRD PARTIES.
AirAsia has a number of joint ventures
in which we have partnered leaders in
various travel-related sectors who are
able to leverage our database and other
resources in order for both parties to
grow. We call these ventures ‘adjacency
businesses’ which, like our ancillary
services, provide the opportunity to earn
additional income. Some of the earlier
adjacency businesses we entered into
have achieved success beyond our
imagination, prompting us to monetise
them for value recognition.
During the year, for example, we sold our
50% equity in the Asian Aviation Centre
of Excellence (AACE) to our partner, CAE
International Holding Ltd (CAE) for a
cash consideration of USD100 million.
This was followed by the sale of 50%
equity in Ground Team Red Holdings
Sdn Bhd (GTRH) to Singapore-based
SATS for SGD119.3 million in early 2018.
Subsequently, not long before this annual
report went to print, we firmed up a deal to
divest our aircraft leasing operations that
are currently undertaken by Asia Aviation
Capital Limited (AACL) for USD1.18 billion.
The intention is to spin off more of our
adjacency businesses when the time is
right.
ASIAAVIATION CAPITAL LIMITED (AACL)
Established as a wholly-owned leasing
arm of AirAsia Berhad in 2014 to serve
primarily the group, AACL quickly evolved,
expanding both its fleet as well as network
of customers to include third parties.
By August 2016, the Group recognised
the potential of monetising its leasing
portfolio, and a new management based
in Singapore was put together to work on
this. Discussions with several interested
investors began towards the end of the
year.
While these discussions were ongoing,
AACL continued to achieve more
milestones. In July 2017, it set up
operations in Ireland enabling it to cover
not only the rapidly growing Asia-Pacific
aviation market from Singapore but also
the more matured European market. Just
a few months after its outfit in Dublin
became operational, AACL executed a deal
with Ireland’s Pembroke Aircraft Leasing
on 16 November to purchase its first
Boeing aircraft, which is being leased to
Norwegian Air, its first lessee in Europe.
Then, in mid-November, AACL entered
into a purchase and leaseback (PLB)
agreement with Mexican low-cost carrier
VivaAerobus for two Airbus A320ceo
aircraft. The first aircraft was delivered to
VivaAerobus on 11 December 2017, and the
second, on 16 February 2018.
The year 2018 began well with the
delivery not only to VivaAerobus but also
of the first Airbus A320neo to AirAsia
Group under a PLB programme that had
been established. However, the turning
point for AACL was being able to finalise
the divestment worth USD1.18 billion.
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AirAsia Group Berhad
BUSINESS REVIEW
146