Tycoon Tony Fernandes’ Capital A Posts First Quarterly Profit Since The Pandemic Amid Travel Rebound

Capital A—controlled by Malaysian tycoons Tony Fernandes and Kamarudin Meranun—reported its first quarterly profit since the pandemic grounded most of AirAsia’s fleet of planes as travel demand surged following the gradual lifting of travel restrictions late last year.

The conglomerate—which holds stakes in the group’s logistics, aircraft maintenance and digital businesses—said Tuesday it posted a net profit of 172.4 million ringgit ($52 million) in the fourth quarter ended December 31, compared with a net loss of 914.7 million ringgit.

“Apart from the aviation group making significant progress towards full recovery, we continue to see encouraging growth momentum and performance from our logistics, aircraft maintenance and digital businesses that were recently established,” Capital A chief executive officer Tony Fernandes said in a statement. “As our fleet continues returning to the skies, all our businesses can leverage the ecosystem further.”

Capital A said total revenue increased three-fold to 2.4 billion ringgit in the fourth quarter compared to the previous year, with AirAsia contributing 2 billion ringgit. While contributions from the logistics unit Teleport and digital businesses are still small, both are gaining traction. AirAsia’s superapp had 12 million monthly active users in December 2022, helping to boost sales of airline tickets and hotel bookings, while Teleport (which counts Lazada, Shopee and Zalora among its customers) completed a record high 34,000 average daily deliveries.

Fernandes isn’t daunted by competition from more established superapps such as Grab and GoTo. “AirAsia can be a very strong digital travel company,” he said in an interview with Forbes Asia in December as he launched the budget carrier’s fifth joint venture in Southeast Asia: AirAsia Cambodia, which is slated to start flying later this year.

AirAsia said it’s optimistic that growth in the airline business will continue into 2023, driven by the return of Chinese tourists following the easing of travel restrictions in the mainland. Despite improvements in the final quarter of 2022, Capital A still posted a full-year net loss of 3.2 billion ringgit, compared with 3.7 billion in the previous year.

“Supported by the recent lifting of China’s zero-Covid policy, we foresee healthy international travel,” the carrier said separately in a regulatory filing. About 150 of AirAsia’s planes are back in service, with its entire fleet of 204 aircraft expected to return to the skies by the third quarter of this year. Capital A shares were up 1.5% and trading at 0.70 ringgit apiece as of midday in Kuala Lumpur.

Fernandes and Kamarudin took over AirAsia in 2001 to build a low-cost carrier that would make air travel more affordable. The partners dropped off the list of Malaysia’s 50 Richest in 2021 due to the airline’s share-price slump during the pandemic.