AIRSHOW-AirAsia's Fernandes says no recapitalisation needed

By Victoria Bryan and Tim Hepher

PARIS, June 16 (Reuters) - AirAsia Bhd Group Chief Executive Tony Fernandes said the low-cost airline had plenty of opportunities to raise cash, and did not need to recapitalise, rebuffing a report questioning the group's accounting practices.

"We have so many cash raising opportunities from our fleet, our investments, from our national cash operations, there is no need for a capital raise," Fernandes told Reuters on the sidelines of the Paris Airshow.

He said Asia's biggest budget airline, which owns 128 aircraft and picked up a series of airline awards on Tuesday, was looking at doing 20 sale and leasebacks.

"We don't want to do too many because we don't need that much cash. But it's just to show the market that it can be done and crystalise the value," Fernandes said.

He said the group could easily raise $1 billion in sale and leasebacks, plus had investments worth $500 million.

AirAsia's shares have fallen to five year lows after Hong Kong-based firm GMT Research issued a report last week questioning AirAsia's accounting practices. In its report, GMT said AirAsia used transactions with associate companies to boost earnings.

In response, AirAsia wrote to investors to say it will raise funds at loss-making associates in Indonesia and the Philippines.

Fernandes, who said he had not hidden the fact that the associates could not repay loans, said local investors were willing to put money into the associates now that AirAsia has announced plans to float them in 2017.

"The fact that a report of that level of detail can come out shows the level of transparency we have. You could not have written so much if we hadn't disclosed so much," Fernandes said of the report, adding that he saw no reason to change the company's business model

"We're a solid company with a solid balance sheet and a solid business plan."

He also played down capacity concerns, saying that AirAsia would sell older planes as new ones were delivered from 2017 and that the company's fleet would expand by between five and six planes a year in net terms over the next three to four years.

AirAsia's shares fell by as much as 9 percent again on Tuesday, but Fernandes said his job was to deliver earnings, not get distracted by share price movements.

"Our first quarter our profits were up 20 percent and our second quarter looks very good. I think we'll have a record year," he said.

(Reporting by Victoria Bryan, Tim Hepher, Editing by James Regan)