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KUALA LUMPUR (September 24): AirAsia Group Bhd is seeking options to raise capital for its renowned digital business division, AirAsia Digital, according to the group’s Chief Executive Officer (CEO) Tan Sri Tony Fernandes.
“It could be convertible debt or stocks. We have just started the process; we don’t need much, ”Tony Fernandes said at the AirAsia Digital press conference here today.
However, he did not reveal exactly how much the company wants to raise.
“We built all of this on our own capital so far, just like we built AirAsia. We will see … we have some debt capital that has been secured for some parts of the group, [namely] Teleport and Santan, to be announced soon, ”he said.
Teleport is AirAsia’s cross-border logistics arm, while Santan is its food and beverage (F&B) unit serving AirAsia’s popular onboard meals, with several franchises under development.
AirAsia Digital, formerly known as RedBeat Ventures, will help diversify the group’s income, Fernandes said, and is an initiative that began two years before the Covid-19 pandemic outbreak.
Regarding the group’s core airline business, he said: “We believe that AirAsia will definitely come back; We just have to wait [for] the borders to be opened. We hope it is imminent. “
He also said that the airline plans to launch new routes for the inland areas of Kuching and Langkawi, as well as a domestic route in Thailand.
On whether the digital business could make up the shortfall in the group’s profits, AirAsia Group CEO Datuk Kamarudin Meranun said: “I don’t think anything can make up the shortfall because we are starting over with this digital business.”
“Hopefully it could cushion the impact a bit. For the moment [the] market is open, aviation will return to its normal days. And the digital business will have expanded and will be another core business. [for us]. It can be as big as our aviation business, ”he added.
Meanwhile, Kamarudin said the digital business should be able to “cushion [the shortfall in earnings] enough for us to survive, ”without disclosing any earnings targets.
According to AirAsia, AirAsia Digital integrates the group’s continuous innovation approach and expertise in business building, best technology solutions, talent development programs and big data insights for travel and lifestyle businesses to thrive. in Asean.
The digital business comprises three main pillars: Venture Builder, RedBeat Academy and Data Center.
Under Venture Builder, AirAsia Digital will incubate and develop strategic businesses, some of which are spin-offs from AirAsia’s business units. The three focus areas are platform, logistics and e-commerce, as well as financial services.
As for RedBeat Academy, it is a collaboration between AirAsia Group’s corporate risk arm, RedBeat Ventures, with Google, which aims to be a comprehensive technology, leadership and innovation training academy. The data center, on the other hand, is a data consulting department that provides a range of data analytics services, including data engineering and data governance.
At the time of this writing, AirAsia’s stock fell one sen to 64 sen, giving it a market capitalization of 2.17 billion ringgit. Some 5.86 million shares were traded.
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