Fernandes: Ease foreign ownership curbs in Asean airlines

KUALA LUMPUR: AirAsia Bhd group CEO Tan Sri Tony Fernandes is calling for the relaxation of foreign ownership in airlines across the Asean region.
“Ownership regulations are far outdated and it’s time to relook them. If a company like us wants to make an investment, we’ll be prevented due to outdated regulations,” he told a press conference on “How We Can Lift Barriers to Airlines Investment” at the World Economic Forum here yesterday.
Fernandes is looking forward to the emergence of a single aviation market, which will allow savings of about 4% of the group’s profits, due to single ownership in different markets.
“Can you imagine an AirAsia holding company which owns 100% of each of the Asean airlines that we could list in every Asean stock exchange ... the efficiency of reducing borrowing costs and in terms of creating more transparent accounts, is huge,” he said.
Fernandes said airport operators such as Malaysia Airports Holdings Bhd can fully own a Turkish airport, but there has always been a cap in foreign ownership in airlines.
“Why is aviation being (an) isolated industry? It has led to capital disruption and under investment ... in some cases, we want to put in more capital, but shareholders don’t want to,” he said.
Nevertheless, Fernandes said AirAsia has made tremendous progress to capture the opportunities in Asean.
Asked whether AirAsia foresees increased competition following the formation of the Value Alliance recently, Fernandes said it will only become competitive if there is common ownership in airlines within the alliance.
“So that’s the strength of common ownership, that’s what the banking part and telecommunication industries have, but why is aviation, as the big driver of economic growth, in a kind of inefficient position?” he added.
Value Alliance members include Australia’s Tigerair, the Philippines’ Cebu Pacific, South Korea’s Jeju Air, Japan’s Vanilla Air, Thailand’s Nok Air and NokScoot as well as Singapore’s Scoot and Tigerair. It allows travellers to book flights on up to eight low-cost airlines on one website.