AirAsia’s Brand Management Unit Heads for Nasdaq Listing After SPAC Deal

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AirAsia, the Malaysian budget airline, is preparing to list its brand management unit on the Nasdaq stock exchange following a Special Purpose Acquisition Company (SPAC) merger. The move is aimed at tapping into the appeal of franchise and licensing opportunities for a U.S. audience, who may not be familiar with the AirAsia brand.

Tony Fernandes, the founder and CEO of AirAsia’s parent company, Capital A Berhad, highlighted the potential of Southeast Asia’s vast population of nearly 700 million people and beyond. Fernandes acknowledged that the AirAsia brand is not well known in the U.S., stating, “We picked America because Americans understand branding better than the markets in Southeast Asia.”

The brand licensing opportunities that AirAsia aims to explore include hotels, mobile services, and airlines in markets such as South Asia and Africa where the company does not have subsidiaries. The newly formed company, Capital A International, is valued at $1.15 billion and will also consider acquisitions and licensing its 14 other brands.

In 2001, Fernandes purchased AirAsia from the Malaysian government for a mere one Malaysian Ringgit and 40 million Ringgit in debt. Since then, the low-cost airline has grown to operate a fleet of over 240 aircraft.

This listing on the Nasdaq is part of Fernandes’ broader efforts to lift Capital A Berhad out of its financially distressed status and secure capital injections for further growth. One significant aspect of this strategy is the planned sale of AirAsia’s core short-haul aviation business to its Malaysia-listed sister firm, Air Asia X. This move will create a unified Air Asia Group, which is aiming to raise $400 million through an equity raise.

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Subject to regulatory approval, the SPAC merger with Aetherium Acquisition Corp. will allow Capital A International to go public on the Nasdaq stock exchange. SPACs, which are publicly traded companies formed solely to merge with or acquire another company, offer a swifter path to a stock market listing.

While the SPAC market experienced a surge in popularity during the Covid-19 pandemic, it has since slowed due to companies failing to meet expectations, market volatility, and rising interest rates. Fernandes emphasized that AirAsia’s real cash flow and profits set it apart from other SPAC ventures that have tarnished the reputation of this listing method.

AirAsia’s journey to the Nasdaq will follow in the footsteps of Grab, the Singapore-based “super app” service focused on Southeast Asia. Grab went public on the Nasdaq in December 2021 after completing a SPAC merger but faced challenges with share price performance. Fernandes believes that Grab’s listing has paved the way for Southeast Asian companies to gain exposure in the American market.

While AirAsia may not yet have the same level of recognition in the U.S., Fernandes is confident that the concept of their business will be better understood in America. The listing on the Nasdaq provides AirAsia with a platform to showcase its brand management unit and tap into the potential of the U.S. market.

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