Tony Fernandes resigns as acting group CEO of AirAsia X

KUALA LUMPUR - AirAsia’s Tan Sri Tony Fernandes has stepped down from his role as acting group chief executive of AirAsia X (AAX) with immediate effect, saying that he wants to focus on other commitments, according to the company’s filing on the local stock exchange.

According to a well-placed source, Mr Fernandes, who is the chief executive of Capital A, which is the holding company of AirAsia Aviation Group, wants to concentrate on the parent company and focus on lifting the Practice Note 17 (PN17) status for AAX, a long-haul budget airline based in Malaysia.

PN17 is a tag given to financially distressed firms which can be delisted should they fail to regularise their finances within a certain frame.

“He wants to concentrate on Capital A and lift the airline out of PN17 as soon as possible,” said the source.

In October 2021, AAX slipped into the PN17 status after its external auditors, Ernst & Young, had expressed a disclaimer of opinion on the airline’s audited financial statements for the 18-month financial period ended June 30, 2021.

Last year, the low-cost carrier announced that it has 12 months to regularise its financial condition, and it was undertaking a proposed debt and corporate restructuring, as well as proposed fund raising.

Mr Fernandes’ resignation comes just days after AAX disclosed last Wednesday its plans of formulating a comprehensive proposed plan to regularise the PN17 condition.

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Despite key changes in the senior management team, the source pointed out that the current AAX CEO Benyamin Ismail would play a key role in enhancing AirAsia’s growth, and the group has yet to find Mr Fernandes’ replacement in AAX.

On Monday, Mr Fernandes disclosed that his key focus would be delivering significant value to shareholders of Capital A, including the AirAsia Aviation Group, aviation services, logistics, travel, fintech and the e-commerce lifestyle platform.

“I am confident that AAX will come back stronger providing a great value mid-range travel, led by the senior leadership teams in Malaysia and Thailand.

“I went in with a clear mandate to restart AirAsia X and bring it back to life from hibernation. I am happy that this has been accomplished with a very edifying plan for 20 aircraft for the AAX Group— 13 aircraft for AAX and seven for Thai AAX.

“My job was to bring the airline back to profitability and growth. We have improved the cost structure, and created the cargo business, which has contributed about 20 per cent to the airline’s revenue during the pandemic and will continue to play a vital role in the recovery of AAX,” he said.

This article was first published in The Straits Times. Permission required for reproduction.