August 24, 2017 / 7:45 PM / a year ago

AirAsia CEO says leasing unit sale is 'imminent'

MONTREAL (Reuters) - AirAsia Bhd (AIRA.KL) Chief Executive Tony Fernandes said on Thursday that the Malaysia-based carrier’s expected sale of its leasing unit to a South Korean group was “imminent,” with no roadblocks to the transaction.

An AirAsia plane prepares for take off at Don Mueang International Airport in Bangkok, Thailand, June 29, 2016. REUTERS/Chaiwat Subprasom/File Photo

AirAsia, the largest low-cost carrier in Asia, is also considering the purchase of Bombardier Inc’s (BBDb.TO) 110- to 130-seat narrowbody CSeries jets, Fernandes told reporters following a news conference at Montreal-headquartered training specialist CAE Inc (CAE.TO).

Asked whether AirAsia’s reported talks to sell the unit have hit any obstacles, Fernandes said there were no “roadblocks” and added “it is imminent.” He did not specify whether an announcement would be made when the carrier reports quarterly earnings next week.

Privately-owned KOTAM, or Korea Transportation Asset Management, is said to be negotiating the final terms to acquire AirAsia’s fully-owned unit, Asia Aviation Capital. Reuters first reported on the deal in March.

KOTAM is part of Kukje Maritime Investment Corp, known as KMarin, which was founded in 2005.

Fernandes was in Montreal to announce the sale of the budget carrier’s 50-percent share of the Asian Aviation Centre of Excellence to CAE, the world’s largest commercial aviation training company.

Under the deal, CAE will remain AirAsia Group’s training partner until 2036.

After flying on the CSeries on Thursday, Fernandes said he was “very impressed with the aircraft,” which he said would be considered for regional markets in Asia.

In June, he said the carrier’s core strategy lies in connecting Asia’s secondary and tertiary cities, with a particular focus on China and India.

“It’s early days,” he said of the talks with Bombardier. “We’ve started the romance so let’s see where it takes us.”

Montreal-headquartered Bombardier is coming under pressure to announce new orders for the fuel-efficient CSeries jets, after failing to secure any substantial orders in more than a year.

Reporting by Allison Lampert in Montreal; Writing by Susan Taylor in Toronto; Editing by Tom Brown

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