Malaysian low-fare carrier AirAsia is finalising plans for a capital injection from new investors while preparing to expand its Boeing 737-300fleet with seven more leased examples and four others purchased from GE Capital Aviation Services (GECAS).

Senior advisor and 5% shareholder Conor McCarthy says AirAsia will on 27 June confirm the identity of new investors who will take a sizeable minority stake, allowing for a further expansion. He adds that while no firm decisions have been taken on moving into the international market, AirAsia is continuing to study this, and services to Indonesia, the Philippines and Thailand are under consideration.

The fleet expansion was revealed just days after Singapore Airlines announced it was studying the establishment of an all-new no-frills carrier rather than keeping open the option of converting regional arm SilkAir into a low-cost unit.

Many observers see AirAsia as a potential threat to SIA, as it could operate international flights from Senai airport near Johor Bahru, a town in southern Malaysia just across the border with Singapore.

AirAsia will take delivery of the four purchased and seven leased 737-300s from GECAS over the next 12 months. Three of its seven current 737-300s are leased from GECAS, although one will be returned. The four it is buying will be the first purchased aircraft in its fleet.

AirAsia has expanded quickly since new owners took over in December 2001 and re-launched the former loss-making full-service airline in January 2002. It has since become profitable, while its fleet has grown from just two 737-300s and many new domestic destinations have been added.

Source: Flight International