AirAsia secures financing for 37 planes

AIRASIA Bhd, Southeast Asia’s biggest discount airline, said it has secured financing for 37 new planes, easing concerns about its ability to fund expansion plans.

The Airbus SAS aircraft are due to arrive over the next two years, chief executive officer Datuk Seri Tony Fernandes said in an e- mailed response to Bloomberg questions late yesterday.
He didn’t provide details on the Sepang, Malaysia-based carrier’s funding arrangements.

The funding may allay fears that AirAsia would be forced to slow its expansion because of a lack of financing. Analysts including K & N Kenanga Holdings Bhd’s Yeonzon Yeoh have said
that the carrier may struggle to raise funds because of the global credit crunch.
A daily said yesterday that AirAsia was close to signing a loan agreement valued at almost RM3.5 billion (US$974 million) to fund aircraft purchases. Barclays Capital and BNP Paribas were given the mandate for the financing, which will be backed by European credit agencies, the newspaper said, citing deputy chief executive officer Datuk Kamarudin Meranun.

The airline has 123 outstanding orders for Airbus A320s, according to the planemaker’s website. The carrier has already received 52 of the single-aisle planes.