AirAsia partners SATS for smoother ride in ASEAN

In this picture taken on December 29, 2014, an AirAsia plane is parked on the tarmac at terminal 1 at Changi international airport in Singapore. (AFP Photo/Mohd Fyrol)

“We are very pleased to announce that two home-grown companies have partnered together to form a new Asean joint venture,” said Tony Fernandes, Chief Executive Officer (CEO) of AirAsia Group.

In line with AirAsia’s goal to solidify its position as the leading low-cost carrier in the Southeast Asian region, the company had recently formalised a partnership with SATS Ltd (SATS) – the chief ground-handling and in-flight catering service provider at Singapore Changi Airport – which will allow both companies to expand their reach in both Malaysia and Singapore.

Services offered by SATS.

SATS – a 70 year old company that provide services such as aviation security, perishables handling and terminal management – has established a new ground handling operations known as SATS Ground Services Singapore (SGSS), which is meant to operate at the new terminal at Changi Airport.

In the official press statement released by AirAsia, SATS will acquire a 50 percent stake in Ground Team Red Holdings (GTRH) in exchange for SATS’ 80 percent stake in SGSS and aggregate cash consideration of SGD 119.3 million (approximately MYR 372.2 million). The GTRH will also be renamed SATS Ground Team Red Holdings and will act as the evenly divided joint investment vehicles of both AirAsia and SATS. Both companies will hold stakes in their Singaporean and Malaysian divisions – Ground Team Red (GTR) and SGSS – correspondingly.

Meanwhile, SATS will hold a 51 percent stake in GTR and the remaining 49 percent will remain with AirAsia. AirAsia will also own a 40 percent stake in SGSS while SATS will own the other 60 percent. The partnership born between SATS and AirAsia will aid the low-cost carrier with its ongoing fleet expansion plan. AirAsia’s expansion goals involves owning 500 planes and hosting a 150 million passengers by 2027. AirAsia is also increasing its intra-ASEAN routes to Lao, Cambodia, Myanmar, Brunei, Singapore, Philippines, Indonesia, Thailand, Vietnam and Malaysia.

Interesting facts about AirAsia. Source: AirAsia's 2016 Annual Report.

AirAsia is currently focusing its attention on developing a more ASEAN-centric future. This is amidst ongoing expansion plans to increase domestic routes and international routes such as Johor Bahru, Langkawi, Melaka and Jeju Island in South Korea. The company has also established its presence in several Southeast Asian nations, particularly in Thailand, Indonesia, Malaysia and the Philippines. AirAsia will also strengthen its operations by adding 23 planes to its existing fleet by the end of 2017.


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