AirAsia unit heads for U.S. listing through SPAC deal as CEO says 'Americans understand branding'

AirAsia is set to list its brand management unit on the Nasdaq after finalizing a SPAC merger, as it bets on the appeal of franchise and licensing opportunities to a U.S. audience that does not yet widely know the budget airline.

Tony Fernandes, AirAsia founder and CEO of Malaysia-based Capital A Bhd. — which owns the short-haul airline and related units including the brand business — told CNBC this week that he would seek to raise awareness of the potential in Southeast Asia's nearly 700 million-strong population and beyond.

"We picked America because Americans understand branding better than the markets in Southeast Asia," Fernandes said, acknowledging that the AirAsia brand itself is not well known in the U.S.

"It's my job to get investors excited about the growth potential of our brand … and also being in a very exciting part of the world, with geopolitics, ASEAN has received much more attention."

Brand licensing opportunities could include hotels, mobile services and airlines in markets such as South Asia and Africa where AirAsia does not have subsidiaries, Fernandes said.

The deal values the new company, Capital A International, at $1.15 billion, according to a release Wednesday. The business will also look at acquisitions and licensing its 14 other brands.

In 2001, Fernandes bought the then-failing carrier AirAsia from the Malaysian government for 1 Malaysian ringgit (roughly 20 cents) and 40 million ringgit in debt. The low-cost airline has grown to a fleet of more than 240 aircraft currently.

Fernandes is engaged in a broader battle to lift Capital A out of the financially distressed status it received from Malaysian regulators during the pandemic and source capital injections to fuel further growth.

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