Capital A CEO Tan Sri Tony Fernandes.
KUALA LUMPUR: Capital A Bhd
’s low-cost airline, AirAsia, has confirmed it is in discussions with a local partner in Vietnam as part of its plan to expand its footprint in Asean.
However, its chief executive officer Tan Sri Tony Fernandes said that while negotiations are ongoing, no agreement has been finalised.
“It is no secret that I have wanted to operate in Vietnam for a long time. As an Asean airline, it is only logical for us to be in one of the most promising countries in the region.
“I can confirm that we are in discussions with a Vietnamese group, but nothing has been finalised as yet,” he said in an exclusive interview with Bernama on the sidelines of the Asean Economic Ministers’ Meeting 2025.
Fernandes said the talks were progressing positively, but cautioned that there were many ways things could go wrong from discussion to execution.
“Still, I am more optimistic than I have ever been about AirAsia entering Vietnam,” he added.
The airline is also holding preliminary discussions in Laos and Brunei, leaving only Myanmar and Singapore as the two Asean markets where AirAsia has yet to establish a presence.
“I have always fought for operations in Singapore; however, I think we have given up on the plan,” he said.
He reiterated his ambition to see AirAsia expand across Asean before he steps down.
“My dream before I leave this job is to be in as many Asean countries as possible. I am very keen on Vietnam,” he emphasised.
To date, AirAsia has obtained air operator certificates to operate in five Asean countries, namely, Malaysia, Thailand, Indonesia, the Philippines and Cambodia.
Should AirAsia’s Vietnam arm take off, it would become the third low-cost player in the market, after Vietjet and Vietnam Airlines’ subsidiary, Pacific Airlines.
Separately, Fernandes said Capital A is optimistic of completing the disposal of its airline business to AirAsia X Bhd or AAX by October, paving the way for the group to seek removal of its Practice Note 17 (PN17) status by year-end.
Fernandes said the three conditions to facilitate the disposal include securing RM1bil in capital, finalising six consent letters and obtaining a waiver from the Thai Stock Exchange on the general offer requirement.
“I can say again that we are making good progress there.
“The trigger point is for us to say we have completed the three conditions precedent to make the disposal. Once we announce that, the rest is just paperwork which will take three to four weeks.
“I’m optimistic that in October we can make the announcement,” he said.
He said Capital A had already cleared several hurdles and was now nearing take-off in its journey towards exiting PN17.
Using an aircraft as an analogy, he said: “If I take it to an aircraft, we’re off the aerobridge, we’re on the runway, taxied and about to take off,” underscoring his confidence that the long-awaited restructuring is finally taking shape.
Fernandes said that once the transfer of the airline business is completed, Capital A will move quickly to apply to Bursa Malaysia to exit its PN17 classification.
Capital A was classified as a PN17 company in January 2022 following the severe impact of the Covid-19 pandemic on air travel.
“I’m hoping that by the end of November or December, we can finally put the Covid-19 episode behind us and show that we have turned the corner,” he added.
During the pandemic which began in 2020, all borders were closed and air travel came to a complete halt, affecting all airlines including AirAsia.
Fernandes noted that the pandemic, combined with PN17, created “a monstrous handicap” for the company, but expressed confidence that the latest restructuring marked a new beginning.
The disposal is also a key step towards Capital A’s longer-term ambition of creating a regional aviation group that was more streamlined and better positioned for growth.
Beyond aviation, Fernandes highlighted the group’s success in building six new companies during the pandemic years, which now form the backbone of Capital A’s diversified portfolio.
These include Asia Digital Engineering, its aircraft maintenance, repair and overhaul unit; Teleport, its logistics and cargo arm; AirAsia Move, Malaysia’s first homegrown online travel agency; Santan, an Asean food brand that has successfully marketed AirAsia’s in-flight meals on the ground; BigPay, its financial technology platform; and ABC, a new venture focused on branding, loyalty and digital assets.
“These companies didn’t exist before Covid-19, but today they are real businesses contributing to the Malaysian economy.
“People were questioning whether we would survive, and now we have built businesses that will create long-term value. The aviation group is going to be stronger,” he said.
He added that Capital A is also exploring capital market opportunities beyond Malaysia. A dual listing in Hong Kong is under consideration, with strong interest from investors in the China market.
