AirAsia lands new investor

The Philippine division of AirAsia has secured a new investor to bolster its resources and facilitate expansion plans, as disclosed by the airline's president, Tony Fernandes. Fernandes is set to arrive in Manila to finalize investment discussions with the new shareholder for AirAsia Philippines. While the investor remains undisclosed, Fernandes affirmed that there are expansion projects slated for the airline prior to the arrival of new aircraft.

AirAsia Philippines previously announced its intention to incorporate Airbus A220s into its fleet by 2028, which will supplant the A320s. These aircraft will be retired from service commencing this year. Fernandes highlighted that the restructuring and shrinking of the airline, coupled with the advent of the A220, bring forth new opportunities for AirAsia Philippines.

The A220 is anticipated to unlock new possibilities for the airline, as it can accommodate tighter runways typically designed for turboprops. Notably, the A220 can match the performance of its larger counterpart, the A320, by seating up to 160 passengers and traversing a distance of 3,450 nautical miles. This flexibility will allow AirAsia Philippines to cater to both domestic and regional routes. However, additional funding is required to cover aviation expenses.

AirAsia Philippines has been grappling with its compliance obligations to aviation regulators, specifically the Civil Aviation Authority of the Philippines (CAAP). In June, the airline was obliged to settle a pending balance of P271.94 million to CAAP in order to prevent flight disruptions. Failure to meet these dues would have led to CAAP barring the airline from landing at provincial airports.

Similar to other airlines, AirAsia is grappling with the impact of rising fuel prices, yet managed to recoup 70 percent of the cost surge through fare adjustments.