AirAsia Shares Rise on Management Buyout Plan Report

Nov. 20 (Bloomberg) -- AirAsia Bhd., Southeast Asia's largest low-cost carrier, rose the most among Kuala Lumpur benchmark index companies after the Star said shareholders may announce a buyout offer next week.

The carrier rose 2.7 percent to 1.16 ringgit at 11:48 a.m., after earlier gaining as much as 4.4 percent. The Kuala Lumpur Composite Index fell 1.8 percent.

Tune Air Sdn., controlled by AirAsia Chief Executive Officer Tony Fernandes, may make a buyout offer of between 1.30 ringgit and 1.35 ringgit a share, the Star said today, citing unidentified people. The company had previously said it may make a 1.35 ringgit bid, if it could secure the financing.

``There is very significant likelihood of a general offer,'' Paul Dewberry, a Merrill Lynch & Co. analyst, wrote in a report today. The announcement may come alongside the company's third-quarter results next week, he added.

Dewberry upgraded the carrier to ``buy'' from ``underperform'' on the buyout plan. He set a target price of 1.35 ringgit.

CIMB Bhd. may lead the group of banks financing the buyout, the Star said.

AirAsia plans to fly to Tashkent next year

JOHOR BARU, MALAYSIA: AirAsia will begin flights to the Uzbek capital of Tashkent by the end of next year, said chief executive officer Datuk Seri Tony Fernandes.

He said the budget airline felt that Central Asia and Eastern Europe were huge potential markets and his company had already conducted initial studies in Uzbekistan and Kazakhstan.

"We can do Uzbekistan next year. With the huge Asian network, many people from South-East Asia would want to go to Uzbekistan," he said.

He said the leg would open up new lines of tourism and business.

He pointed out that the historic city of Samarkand was world famous and attracted tourists.

Fernandes said AirAsia had always been about opening up new areas and markets and felt proud that the company was recognised as providing a service to the country.

He said AirAsia would probably start with three to four flights a week.

When asked about the rates, Fernandes said that it was still too early to decide but would probably around RM800 to RM900.

On Monday, Prime Minister Datuk Seri Abdullah Ahmad Badawi, who is on an official visit to Uzbekistan, said he had asked Fernandes to consider flying to Tashkent.

AirAsia stock jumps

AIRASIA Bhd (5099) jumped as much as 3.5 per cent, its second-biggest gain this week in Kuala Lumpur trading, after a newspaper reported that the carrier’s largest shareholders may announce a buyout offer next week.

At close, the stock rose 4 sen, or 3.5 per cent, to RM1.17, the most since September 12 and the third-biggest gainer on the benchmark Composite Index.

Tune Air Sdn Bhd, which owns 31 per cent of AirAsia, will probably offer the buyout at a price of RM1.30 (36 US cents) to RM1.35 a share, the paper said, citing people it didn’t identify.

CIMB Bhd may lead the group of banks to finance the buyout, the newspaper said, citing people it didn’t identify.

Return money of those who booked tickets before fuel surcharge waiver, AirAsia urged

BUDGET carrier AirAsia has been urged to look into the possibility of refunding the fuel surcharge to passengers who made their flight bookings before the surcharge was waived, reported Sinar Harian.

Federation of Malaysian Consumer Associations adviser Chua Kim Tee welcomed the airline’s move to waive the surcharge on Nov 11, but said the benefits should also be extended to passengers who made advance payments for their flights prior to the announcement of the waiver.

“In this context, maybe AirAsia can return the fuel surcharge which had been paid earlier as the passengers had not used the service,” he said.

“When the global oil prices go up, we have no choice but to pay the surcharges.

“But with the current market situation, abolishing the surcharge is the right way to go.”

AirAsia X prepares for launch of Stansted Routes

The long haul, low cost carrier, AirAsia X is set to announce the launch of new flight routes from London Stansted to Kuala Lumpur next week.

The Malaysian airline explained that Stansted Airport's good connectivity was the reason for their choice of base.

The airline has arranged a press conference for the 25th of November at London County Hall where it will be announcing "massive news for London".

Services from Stansted are to be launched early next year originally aiming for the £300 mark, however fuel prices have pushed the figure up to a more likely £350.

Richard Branson owns 20% of the AirAsia subsidiary which is the biggest low-cost airline in the region.

Chief executive Azran Osman-Rani confirms that they have been finalising preparations for the inaugural flight and say that the current global economic climate has not affected operations in any way.

BNP Paribas, Natixis seal US$336m financing for AirAsia planes

KUALA LUMPUR: BNP Paribas and Natixis Transport Finance have closed for AirAsia Bhd a US$336mil Sharia-compliant financing for up eight Airbus 320-200 aircraft.

BNP Paribas and Natixis Transport Finance are the lead arrangers, global coordinators and book runners for the financing, according to a joint statement issued on Wednesday.

This Sharia-compliant French Single Investor Ijarah is the first Islamic French-Malaysian optimised transaction of this kind.

“Above a cost efficient 100% financing structure, the Islamic Ijarah ensures that AirAsia’s capital and investment allowances are preserved.

“Purchase of each aircraft is through a mix of euro-denominated equity, a US dollar denominated investment agency agreement – Wakala from Islamic financiers and a US dollar-denominated Wakala granted by AirAsia and refinanced by a ringgit denominated Commodity - Murabaha,” the statement said.

AirAsia deputy group chief executive officer Datuk Kamarudin Meranum said the unique financing structure had enabled the low-cost carrier to continue to enjoy overall competitive financing terms for its aircraft purchases, especially under current market situation.

He added the structure had also encouraged the innovation and creativity in structuring Islamic products and promote the development of aircraft financing in Malaysia with the participation of RHB Islamic and Bank Rakyat.

AirAsia flies to Nakhon Si Thammarat

Thai AirAsia on Thursday inaugurated its Bangkok-Nakhon Si Thammarat flight, increasing the number of its domestic routes to 11.

The flight is servied by Boeing 737 aircraft, quoting the starting price of Bt750.

Nakhon Si Thammarat Governor Phanu Uthairat welcomed the new flight, citing that it would give convenience to people in the province as well as investors. He said the province and the airline are planning a joint tourism promotion campaign.