AirAsia secures financing for four Boeing 737-300

AirAsia, Asia's first low fare airline, has secured bridge financing worth RM100 million with DBS Bank (Singapore) and Southern Bank Berhad (Malaysia) for the purchase of four Boeing 737-300. The deal will see DBS Bank and Southern Bank Berhad each providing RM50 million funding respectively for the purchase of the four aircraft.

With the funding in place, AirAsia can take delivery of these aircraft which are expected to be rolled into the fleet from November 2003 to February 2004. The financing provided by these banks, both key banking institutions in their respective countries, shows the confidence of the banking community of both Malaysia and Singapore in AirAsia's business model and management.

"AirAsia is ready to move forward with our fleet expansion and growth strategy in order to provide more low fares so more people can fly. This new deal with DBS Bank and Southern Bank will enable us for the first time to purchase four aircraft and meet the huge demand for more low fares in the country and soon in the region. I would like to thank both DBS Bank and Southern Bank for having great faith in AirAsia and for letting us share the benefits of our growth with them." said Tony Fernandes, Chief Executive Officer, AirAsia.

Jackson Tai, Vice-Chairman and CEO, DBS commented, "DBS is pleased to be given the opportunity to be involved in the growth of AirAsia and to help finance the expansion of its fleet with a RM 100 million bridging facility together with Southern Bank Berhad. We believe that AirAsia is well placed to tap the growth in the nascent low-cost carrier market in South East Asia."

YBhg. Dato Tan Teong Hean, Chief Executive Director, Southern Bank Berhad said, "We are happy to participate in this new strategic partnership with AirAsia and DBS Bank. Southern Bank has been financing businesses in Malaysia for over 40 years and we are proud of the many businesses we have helped grow over this period. An exciting and innovative company, AirAsia is in a very competitive industry with an extraordinary business model that has proven to be successful. We are pleased to co-finance and partner this exciting new entrant to the airline industry in Malaysia and the region." .

DBS is the largest financial services provider in Southeast Asia as measured by assets, with anchor markets in Singapore and Hong Kong. AirAsia's new deal with DBS will be the second alliance formed with a Singapore partner after the airline recently signed a deal with Singapore Post to provide new payment channels in Singapore via Singapore Post outlets.

AirAsia is still in the final stages of evaluating the Private Debt Security (PDS) through the issuance of approximately RM 100 million bonds for the longer term financing of these aircraft as well as for working capital. However AirAsia stated that it  is also evaluating all options before making a final decision into its long term funding which is needed to facilitate its expansion plans not only in Malaysia but also in the region.