In a virtual interview with Nikkei Asia, Fernandes said most of the company’s digital businesses will be in the black next year, while the recovery in international travel will boost earnings of its core airline operations.
“A lot depends on the airline in the short term, and we are forecasting it to be profitable again in 2023,” he said.
“All digital businesses, except BigPay and incubator businesses, will be profitable by 2023. BigPay will be profitable in 2024.”
BigPay, the e-wallet majority-owned by Capital A, is currently bidding for a digital banking licence from the central bank as part of a consortium with South Korea’s SK Group, which has invested RM100 million in the company.
Fernandes said international air travel is poised to recover by the year’s end, with more countries announcing the reopening of borders to allow travel and tourism.
“I certainly don’t see China opening up anytime soon, but I think the rest of the world is, which means aviation is certainly going to be better in 2023,” he said.
“I think Chinese traffic will be replaced by other destinations because people want to travel. So, I would say by the fourth quarter, we should be back to where we were in terms of all of our planes operating.”
AirAsia reported a net loss of RM5.1 billion in 2020, a sharp deterioration from the RM315.8 million loss it reported in 2019. Revenue plunged from RM11.9 billion in 2019 to RM3.1 billion in 2020.
For the first nine months of 2021, the airline reported a net loss of RM2.2 billion, from a RM2.7 billion net loss during the same period of the previous year. Revenue fell from RM2.97 billion to RM1.02 billion.
The airline is currently placed under practice note 17 (PN17), an index related to companies in financial distress.
Companies that fall within the definition of PN17 are required to submit proposals to the stock exchange for restructuring and reviving their operations in order to maintain listed status.
Fernandes said Capital A fell under the PN17 index only “due to accounting standards, and it had nothing to do with liquidation or the fundamentals of the company”.
He also remained confident that the airline would be taken off the index in the near future. AirAsia’s share price has tumbled 17%, year-to-date, to RM0.67 per share, as of the Friday midday break.
Fernandes had said earlier this month that Capital A would raise over RM1 billion to fund its working and operating expenditure.
Its cargo arm, Teleport, recently closed a fundraising of RM200 million and its superapp business will soon conclude a cash call of up to RM200 million.
“So, overall, I think it’s going to be more than RM1 billion,” he said at the time.
The airline has so far raised RM2.5 billion, including a RM500 million federal government-guaranteed loan under a scheme introduced to assist companies directly affected by the pandemic.
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