Capital A Berhad has announced a major financial boost for AirAsia through the successful signing of a $443 million revenue bond. This financing marks an important step in reinforcing AirAsia’s financial position and supporting its growth after the global pandemic’s challenges. The bond will play a key role in AirAsia’s efforts to emerge stronger and more resilient in the competitive airline market.
Two leading private credit funds, Ares Management Corp and Indies Capital Partners, have committed $200 million of the total funding. This portion of the bond will be used to reactivate aircraft that were grounded during the pandemic. The remaining $243 million, provided by aircraft lessors, will help refinance existing lease liabilities, further stabilizing the airline’s balance sheet.
Tony Fernandes, CEO of Capital A, expressed the importance of this financial milestone. He stated, “Securing this $443 million revenue bond is a monumental development for us. It reflects the immense confidence that investors have in our vision and future.” Fernandes emphasized that this funding brings Capital A closer to completing its post-pandemic recovery, with the goal of exiting PN17 status after obtaining necessary regulatory approvals. He added that despite the challenges of the past five years, the future holds substantial rewards for shareholders as AirAsia enters a new growth phase.
Bo Lingam, Group CEO of AirAsia Aviation Group, highlighted how this revenue bond will enhance AirAsia’s financial position and liquidity. With the resurgence in travel demand, the funds will enable AirAsia to expand and reactivate its fleet. The airline plans to bring back 10 aircraft in October, with 15 more to follow in 2025. Lingam noted that with ongoing improvements to customer experience and a rapidly expanding network, AirAsia is well-positioned to achieve its goal of becoming the world’s best airline.
Strategic Planning and Investor Confidence
Fernandes reiterated the significance of this bond deal, calling it a critical turning point for AirAsia. He stressed that the financing is not just about recovering from the pandemic, but about emerging stronger and more competitive. The deal highlights the effectiveness of AirAsia’s strategic planning and the strong support from its investors, setting the stage for a promising future.
The transaction was advised by Evercore Asia (Singapore) Pte. Ltd., with additional legal advice provided by A&O Shearman and Christopher & Lee Ong.
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