Don't Miss

AirAsia to sell stake in loyalty scheme

By on May 21, 2015

Malaysia’s AirAsia is in talks to sell a minority stake in its loyalty scheme joint venture to private equity firms, in a deal that could value the business at about $330m, Airwise reports.

AirAsia BIG, the loyalty programme owned by the budget airline and Malaysia’s Tune Group, could raise about $100m by selling a 30 per cent stake, people familiar with the matter told Reuters news agency.

The sale highlights AirAsia’s attempts to monetise its affiliates and comes after the airline – co-founded by entrepreneur Tony Fernandes – reported its first net loss in two years in the October-December quarter.

Asian airlines are becoming aware of the value of frequent-flyer and loyalty programmes. Last year, Virgin Australia sold a minority stake in its frequent-flyer scheme to private equity firm Affinity Equity Partners at a valuation which implied it was worth more than a third of the airline’s total enterprise value.

The sources declined to be identified as the discussions are confidential.

The deal was expected to close in a few months, although the talks were currently at an early stage, with the value and stake subject to change, the people said.

AirAsia’s BIG loyalty programme has more than 12 million members and is spread across Southeast Asia. It includes over 100 partners ranging from credit card companies, retail stores, hotels and travel industry brands.

Underscoring the potential in Southeast Asia, home to a rapidly-growing middle-class market and a 600 million-plus population, AirAsia brought in Toronto-listed Aimia last year as a minority investor in Think Big Digital, which operates AirAsia and Tune Group’s loyalty programme.