Malaysia-based low cost airline, AirAsia, announced Tuesday (August 14) that it has divested its remaining 25% equity interest in joint venture unit, AAE Travel Pte. Ltd., to Expedia Group for US$60 million (RM240 million) cash.
Tony Fernanded: Sale of the JV is airline’s last non-core investment. (Image credit: ArAsia)
“The cash consideration is US$60 million, net of AirAsia’s concurrent purchase of AirAsiaGo.com domain names and related assets from AAE Travel Pte Ltd,” said the two companies in a joint statement.
AAE Travel, a licensed online travel agency (OTA) in Singapore, was formed by the two firms in March 2011 as a 50:50 JV. The deal was then inked by AirAsia group chief executive officer, Tan Sri Tony Fernandes, and former CEO of Expedia Group, Dara Khosrowshahi.
In March 2015, the carrier divested 25% stake of AAE Travel to Expedia Group, giving the company a 75% equity in the JV. This latest transaction makes the company full owner of the OTA.
Earlier this year it was reported that Fernandes has reaffirmed its plans to dispose of its remaining stake in AAE Travel as part of the carrier’s move to sell its our non-core investments to build its digital portfolio, as it aims to be a fully digital airline in the near future.
“This sale represents the divestment of the last of our non-core investments from the previous round of joint ventures,” explained Fernandes.
He added the proceeds would be used to develop the group’s digital and logistics products such as BigPay, Travel 360, Redbox Logistics and Ourshop.
“This first set of joint ventures has taught us a tremendous amount, and shareholders who have seen huge returns from our first round of partnerships haven’t seen anything yet.”
As part of the sale agreement, AirAsiaGo.com domain will continue to be powered by Expedia Group. The site offers a full suite of travel products including AirAsia flight and hotel packages featuring Expedia Group lodging content.
Fernandes commended Expedia Group as “a great partner to AirAsia” and that the company looks forward to continue working “very closely in the future, particularly regarding regional and global distribution of AirAsia flights.”
Mark Okerstrom: Group believes in immense potential of Asian travel market. (Image credit: Expedia Group)
Mark Okerstrom, Expedia Group president and chief executive officer, shared the same sentiment: “AirAsia has been a fantastic partner for the past seven years, helping to establish Brand Expedia as a strong and increasingly locally relevant player in the Asia region.”
He added that acquiring full ownership of AAE Travel reflected the group’s belief in the immense potential of the over US$485 billion Asian travel market.
“This transaction unlocks better integration of our Brand Expedia Asia business into our core global travel platform, giving us even greater confidence in our ability to harness the huge growth potential that Asia represents.
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