AirAsia Group has disposed of its remaining 25% equity interest in AAE Travel to Expedia Group, Inc. AAE Travel is a joint venture formed by the two companies in March 2011, and Expedia Group has held 75% equity in the online travel agency since 2015.
The cash consideration for the sale is US$60 million, net of AirAsia’s concurrent purchase of AirAsiaGo.com domain names and related assets from AAE Travel. AirAsiaGo.com, which offers a full suite of travel products including AirAsia flight and hotel packages featuring Expedia Group lodging content, will continue to be powered by Expedia Group.
The sale comes months after AirAsia’s group CEO Tony Fernandes reaffirmed the company’s plan to deliver in the sale of AAE Travel in March this year. Fernandes also said the airline will continue to focus on core operations and dispose its non-core assets. AirAsia first divested its stake from 50% to 25% in 2015, increasing Expedia’s total ownership to 75%.
“Acquiring full ownership of AAE Travel reflects our belief in the immense potential for us in the over US$485 billion Asian travel market. This transaction unlocks better integration of our Brand Expedia Asia business into our core global travel platform, giving us even greater confidence in our ability to harness the huge growth potential that Asia represents," Mark Okerstrom, president and CEO, Expedia Group said.
He added that AirAsia has been "a fantastic partner" for the past seven years, helping to establish Brand Expedia as a strong and increasingly locally relevant player in the Asia region.
Meanwhile, Fernandes said the sale represents the divestment of the last of its non-core investments from the previous round of joint ventures. The proceeds will be used to develop big unicorn products such as BigPay, Travel 360, Redbox Logistics and Ourshop.
"This first set of joint ventures has taught us a tremendous amount and shareholders who have seen huge returns from our first round of partnerships haven’t seen anything yet. Expedia Group has been a great partner to AirAsia and we look forward to continuing to work very closely in the future, particularly regarding regional and global distribution of AirAsia flights,” he added.
(Photo courtesy: 123RF)