Capital A Extends CEO Tony Fernandes' Contract for Five More Years

Capital A Berhad, the parent company of AirAsia, has extended the contract of CEO Tony Fernandes for the next five years. The Board of Directors approved an incentive package for Fernandes to align his interests with those of the shareholders and drive the long-term success and sustainability of Capital A.

Fernandes, who had earlier intended to retire within the next five years, agreed to put aside his retirement plans at the request of the company's board to ensure the company's survival. "2025 will be the year when AirAsia would be better than it was in 2019," Fernandes stated.

AirAsia, which Fernandes has led since 2001, has grown to become one of Asia's largest airlines but was heavily impacted by the pandemic. Capital A is working on a restructuring plan to lift its PN17 (financially distressed) status, and Fernandes expressed confidence that the aviation business will return to pre-pandemic levels by the second half of 2023.

Over the next five years, Fernandes plans to complete the full transformation of Capital A, with the company's businesses, including Teleport, MOVE Digital, Capital A Aviation Services Group, and Capital A International, set to become separately listed public companies. The Board praised Fernandes for his track record of successfully transforming the company and driving growth, and expressed confidence that under his continued leadership, the company will achieve even greater milestones in the future.

Why this matters: The extension of Tony Fernandes' contract as CEO of Capital A is a significant development for the company and the aviation industry in Asia. As AirAsia and Capital A navigate the challenges posed by the pandemic and work towards recovery, Fernandes' leadership and vision will play a critical role in shaping the company's future.

Fernandes' immediate plan is to uplift Capital A's PN17 status and ensure the growth of the company's subsidiaries. The company is also expected to make an announcement on the merger of Capital A's airline business with AirAsia X Bhd by the end of the month. Fernandes mentioned that AirAsia may consider other suppliers, including Chinese planemaker COMAC, as it looks to expand its fleet amid an industry-wide supply crunch.

Key Takeaways

• Capital A extends CEO Tony Fernandes' contract for 5 more years.
• Fernandes shelved retirement plans to lead Capital A's transformation.
• Capital A aims to lift PN17 status and return to pre-pandemic levels by 2023.
• Fernandes plans to list Capital A's subsidiaries as separate public companies.
• Capital A may consider COMAC as a supplier to expand its fleet.