Tuesday, June 26, 2007

Richard Branson in talks to buy stake in AirAsia X parent company

The company operating AirAsia X, Malaysia's first long-haul budget airline, could sign a deal as early as next month to sell a 20 percent stake to Virgin Atlantic's chairman, Sir Richard Branson, for US$6.9 million (euro5.1 million), industry officials said Monday.

Branson may buy the stake from Tony Fernandes and Kamarudin Meranum, the founders of the company, Fly Asian Express.

The two men own a combined 60 percent of Fly Asian Express, which plans to launch low-cost flights from Malaysia to India, China and Europe later this year.

"We have been in talks and he may take a 20 percent stake,'' one official familiar with the issue told Dow Jones Newswires.

"The talks are continuing though there still are things to iron out,'' he said.

The official declined to be named because of the sensitivity of the negotiations.

Another official said a possible deal could be signed as early as next month and could cost Branson US$6.9 million.

Fernandes and Kamarudin founded Asia's most successful budget airline, AirAsia Bhd.

Fly Asian Express has a 30-year license to use the AirAsia brand and facilities.

Its new airline is seen as a test of whether the highly successful low-cost airline model can be profitable on long-haul flights, which are dominated by full-service airlines.

Source : STAR
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