ASEAN KEY DESTINATIONS
AirAsia bags The Asset’s ‘Best Regional ECA-backed Facility’ award!
SEPANG, 22 March 2013 – AirAsia, the world’s best low cost airline, carves another financial excellence accolade in its roll of honour by winning the ‘Best Regional ECA–backed Facility’ award at the ‘Triple A Transaction Banking Awards 2013’ ceremony in Hong Kong yesterday, organised by ‘The Asset’ which is a leading finance publication for Asian corporates and global institutional investors.
The award illustrates AirAsia and its partners’ expertise and innovative approach in securing financing for its fleet of Airbus A320s. It’s also a significant acknowledgment on the success of AirAsia’s deal with J.P. Morgan, inked in 2011, with UK’s export credit agency (ECA), United Kingdom Export Finance (UKEF) as the transaction’s guarantor.
AirAsia Berhad’s Manager of Investor Relations, Benyamin Ismail, attended the ceremony and accepted the award on the airline’s behalf.
The ‘winning’ agreement featured a deal size of USD600 million, with J.P. Morgan as the sole arranger and financier in acquiring 18 Airbus A320 aircraft, with deliveries scheduled in 2012 and 2013. The 12-year financing facility was 100% guaranteed by UKEF. Airbus has delivered ten aircraft to date with a remaining eight aircraft scheduled for delivery by end 2013.
AirAsia Berhad CEO, Aireen Omar said, “Innovation is central to AirAsia’s growth and financial strategies. In order for AirAsia to maintain its edge as the best low cost airline in the world, it is vital for us to secure aircraft financing at competitive rates. J.P. Morgan’s innovative solution and flexible approach not only presented us with that opportunity but also met our evolving funding requirements. We are delighted to be working alongside J.P. Morgan to bring air travel at affordable rates to Asia.”
Aircraft acquisition is a major part of the airline’s expansion strategy and to retain its leadership in the market. Despite economic turbulence that gripped the Asia Pacific region and posed great challenges to the aviation industry, AirAsia continued to move forward with its plans to acquire more fuel-efficient aircraft, essential to its growth in the region.
As specified in the agreement, the aircraft under the deal would be owned and operated by AirAsia Group’s five associate airlines in Malaysia, Indonesia, Thailand, the Philippines and Japan.
By this, the judging panel of the ‘Triple A Transaction Banking Awards 2013’ realized the complexity posed by the AirAsia-J.P.Morgan-UKEF transaction, due to the requirement of separate financing/leasing structures for each jurisdiction.
The judges decided in favour of the deal as it displayed intricate planning, featured unique and customized aspects including multiple drawdown (over a two-year period) and the option to securitize the loan in the capital markets.
The ‘Best Regional ECA–backed Facility’ award is the second financial excellence award received by AirAsia Group for 2013. In January, leading international magazine Euromoney named AirAsia Berhad as winner of the overall best managed company in Malaysia as well as the best managed company in Asia in the Airlines/Aviation sector for the Euromoney ‘Best Managed and Governed Companies - Asia poll 2013’.
AirAsia also won the Air Transport News (ATN) ‘2013 Low Cost Airline of the Year’, an accolade that recognize and honour the best performers in the aviation industry, in March 2013.
Quick reference of the AirAsia-J.P.Morgan-UKEF aircraft financing deal:
Award: ECA-backed Facility
Amount: USD600 million structured loan
Sole arranger and sole lender: J.P. Morgan
ECA: United Kingdom Export Finance (UKEF)
About the AirAsia Group
AirAsia, the leading and largest low-cost carrier in Asia, services the most extensive network with 85 destinations. Within 11 years of operations, AirAsia has carried over 180 million guests and grown its fleet from just two aircraft to 120. The airline today is proud to be a truly ASEAN (Association of Southeast Asian Nations) airline with established operations based in Malaysia, Indonesia, Thailand, Japan and the Philippines servicing a network stretching across all ASEAN countries, China, India and Australia. AirAsia was named the World’s Best Low Cost Airline in the annual World Airline Survey by Skytrax for four consecutive years in 2009, 2010, 2011, 2012.
About The Asset
The Asset is a leading finance publication for Asian corporates and global institutional investors active in the region. The magazine specializes in providing analysis and insight into how Asia’s leading companies raise and manage their capital, as well as the buying behaviour of global institutional investors active in Asia and the Middle East.
Nazatul Ekma Mokhtar
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