CALC to Invest in Indonesian Airline Operating Company TAM
Extend downstream into end-user of aviation value chain
Further enhance Group’s business synergies
CALC (the “Group”, SEHK stock code: 01848), a full value chain aircraft solutions provider for the global aviation industry, today announced that it would be investing in an Indonesian airline operating company, PT TransNusa Aviation Mandiri ("TAM"), through a subscription agreement with Aviation Synergy Limited (“Aviation Synergy”), under which the Company agreed to indirectly invest and acquire a 35.68% equity interest in TAM for a total cash consideration of USD 28 million (equivalent to approximately HKD 218.4 million) at completion. This is a significant move for CALC to expand its downstream footprint to cover the entire aviation value chain, aligning the Group’s business strategy in combining vertical integration and horizontal expansion.
The investment in TAM makes CALC a first-mover to expand its full-value chain business model into the ultimate end-user of the aviation value chain, which allows it further exploit the synergy in the “manufacturer-lessor-airlines” ecosystem. Such competitive advantage would enable the Group to capture value at every point of an aircraft life cycle, including that for the Chinese-manufactured aircraft. The strengthened aviation value chain also paves the way for the Group to launch more aviation-related funds, including Renminbi aviation fund, to support future business expansion with more efficient turnover of its capital leveraging on its unique asset-light model.
Mr. Mike POON, Chief Executive Officer of CALC, said, “Investing in TAM will reinforce the Group’s existing strategic alliance with aircraft manufacturers and parts suppliers, which is an essential component for the Group’s aircraft full value chain. Establishment of airline business has also put CALC’s full vision to become the one-stop solutions provider into action by tapping into the end-user of the value chain. Going forward, the Group will press ahead its vertical and horizontal integration strategies, by integrating asset-light model and service enrichment to provide all-round customised asset management solutions for the global aviation industry. We believe this unique business model would further consolidate CALC’s position in the aviation ecosystem.”
TAM operates the airline TransNusa based in Indonesia. TransNusa currently operates 30 domestic routes in 24 cities and one international route between Indonesia and Timor Leste and provides crucial “last-mile” air connectivity services between destinations within Indonesia and international aviation hubs.
According to IATA, Indonesia is the world’s tenth-largest aviation market in 2017. In recent years, with its fast-growing economy and huge market potential, Indonesia is expected to outperform the fast-growing Asia Pacific region and climb to the fourth largest by 2030.