Sir Richard Branson’s Virgin Group has acquired a 20% stake in Malaysian low-cost carrier AirAsia’s planned long-haul sister airline.
The long-haul budget carrier is being established by some of AirAsia’s key shareholders, including group chief executive Tony Fernandes, who made the Virgin Group investment announcement on 10 August at an event in the Malaysian administrative capital Putrajaya with Virgin Group founder Branson.
 |
|---|
© EMPICSBranson says that “basically we will put in whatever is necessary to make this airline a success” |
Chairman of the new carrier, Kalimullah Hassan, says that "sceptics may say it is a relatively untested business model...but we believe we are good for the money".
The amount Virgin Group pays for the stake will depend on what the new airline is ultimately capitalised at. Branson says that “basically we will put in whatever is necessary to make this airline a success”.
It will be 60%-owned by a consortium of private investors led by Fernandes, 20%-owned by Virgin Group and 20%-owned by publicly traded AirAsia. AirAsia has yet to finalise its stake purchase, however.
The long-haul carrier is to fly Airbus A330-300s using the air operator's certificate of Fly Asian Xpress (FAX), which operates turboprops in East Malaysia.
FAX is dropping turboprop operations in the coming weeks to focus on long-haul services, which are due to be launched late in September or early in October using a single leased A330. Fifteen more A330s are on order with Airbus for delivery from next year.
Traffic rights have been secured for services to Melbourne Avalon and the Gold Coast in Australia, as well as London Stansted. Kalimullah says services to the Gold Coast are likely to be launched first, along with Hangzhou in China.
A licensing deal has been agreed to allow the new airline to use the AirAsia name for its flights.
Source: FlightGlobal.com
