Capital A Bhd CEO Tan Sri Tony Fernandes: Just to clear that up for everyone, AirAsia is not buying SriLankan Airlines. AirAsia Consulting, which will set up its own fund, is looking at buying SriLankan Airlines. (Photo by Sam Fong/The Edge)

KUALA LUMPUR (April 24): Capital A Bhd’s unit AirAsia Consulting Sdn Bhd is the entity that is bidding to acquire SriLankan Airlines, and if it materialises, will raise its own capital for the acquisition, according to chief executive officer Tan Sri Tony Fernandes.

“Just to clear that up for everyone, AirAsia is not buying SriLankan Airlines. AirAsia Consulting, which will set up its own fund, is looking at buying SriLankan Airlines. So, it's not AirAsia,” he told reporters here at a briefing on Wednesday for Capital A to announce the extension of his tenure as CEO for another five years.

“I know it's confusing, and AirAsia Consulting will be changing [its name] to Capital A Consulting very soon. So, that's for airlines who want to consult our 23 years of experience, but [AirAsia Consulting] is also looking for opportunities to invest in airlines outside of Asean. AirAsia is fully focused on Asean. That's our goal,” he said.

Capital A is carrying out a series of restructuring to remedy its Practice Note 17 status due to its negative equity position, which amounted to RM10.47 billion as at Dec 31, 2023 (FY2023).

These corporate exercises, pending regulatory approvals, include merging Capital A's airline businesses with AirAsia X Bhd, the listing of its branding businesses in the US, and raising accounting gains to hopefully be sufficient to offset its negative equity position.

AirAsia Consulting CEO Subashini Silvadas told The Edge on Tuesday that the company is still in the pre-qualification stage for the acquisition of national carrier SriLankan Airlines, and has yet to submit any price bid since due diligence has not been carried out.

Reuters reported on Monday that the AirAsia group is among six bidders for Sri Lanka's state-run carrier, as the island nation looks to reduce losses incurred by government-owned enterprises under a US$2.9 billion (RM13.8 billion) International Monetary Fund programme.

“And yes, [AirAsia Consulting] has put in a bid to buy SriLankan Airlines. Nothing to do with AirAsia. [AirAsia Consulting] will raise their own capital to do that. New thing, there are two aims [for AirAsia Consulting]: one is to potentially take stakes in airlines outside of the AirAsia group and also just to provide consulting service,” said Fernandes on Wednesday.

“Over the last 23 years, we have built up a whole lot of experience, but we have decided for AirAsia to only focus on Asean. Many airlines want us to help them set up a low-cost airline. Many governments have approached us to take over their airlines, AirAsia is not interested, [as] it is actually purely focused on Asean. So, we created this company called AirAsia Consulting, which sits under Capital A Aviation Services."