What happened
AirAsia CEO Tony Fernandes announced plans to start a new airline, betting on expansion despite high oil prices. The new carrier will likely follow the successful low-cost model. Fernandes stated the airline will be announced in the next month or two, with AirAsia already moving planes to support the venture. This expansion follows AirAsia's multibillion-dollar order for 150 Airbus A220 aircraft. To fund the new venture, AirAsia is preparing to sell up to US$600 million in bonds and is in talks with Malaysian banks for refinancing. The company is also meeting with Canadian pension funds. While AirAsia's shares have tumbled due to a lack of fuel hedging, Fernandes remains confident in bearish oil prices. The new airline's specific destination or base is not yet disclosed, though AirAsia has discussed expanding in Vietnam