Wednesday, 20 May 2015

AirAsia: perfect PR

"AirAsia looks to sell stake in loyalty programme"

"AirAsia denies sale of stake in loyalty programme"

Two announcements in the span of two days, twice in the news, for free.

And at the same time letting the world know about its loyalty program BIG, and how valuable that might be. If BIG is really that big as reported is of course not sure since no part is actually being sold to an independent outside investor (which would have given some base line valuation).

It can't get much better than that, AirAsia's PR engine again running full steam ahead.

The "timing" is also "convenient", with negative sentiment towards AirAsia X, which is trading "ex rights issue" at a price of only RM 0.28, a far cry from its IPO price.

The loyalty program and its recently established leasing company Asia Aviation Capital are two new members of the highly complicated Tune Air group.

This group has different shareholdings in a large group of subsidiary companies (some of them listed, others not), which depends one a huge volume of Related Party Transactions on a daily basis.

From a corporate governance point of view this is undesirable. I wrote about this before. Independent directors have to ensure that all transactions are done on a arms length basis. I have doubt this can be done, especially in the Malaysian context.

The solution, list the holding company and keep all subsidiaries 100% owned, is simple and from a CG point of view highly desirable.

But of course, this would be less "sexy", and one could only list the holding company once.


  1. The BIG loyalty programme is rubbish. I used AirAsia frequently, but hardly accumulated any points...

  2. Thanks Wammo for sharing your experience, that was fast .....!

    The sale was denied, so there will be no outside (objective) valuation of BIG.