Investors may have fallen out of love with Asia's largest budget airline, but the founder and chief executive of AirAsia told CNBC the indicators are there for its share price to recover.
"When people begin to look at it on a macro scale, then our share price will begin to return to where it should be. We're trading at NTA (net tangible assets) at the moment which is fairly ridiculous, our margins are still up there, our cash [flow] is very strong but we're in a good part of the world so we're optimistic," Tony Fernandes told CNBC Europe's "Squawk Box."
Shares of Asia's largest budget airline by passengers and fleet size have fallen 19 percent over the last 12 months with its units in the Philippines and Indonesia struggling to turn a profit and are not predicted to do so for two years.
(Read more: AirAsia ready to take on India challenge: CEO)
Summing up the airline's problems with increased competition from other low-cost carriers, AirAsia Berhad, the company's full name, reported third-quarter net profits down 78 percent in November 2013 from the previous year on foreign exchange losses on borrowings.
Despite the decline, the AirAsia X – the long-haul unit of AirAsia - placed an order for 25 Airbus jets worth $6 billion last month as it aims to see off competition in the region and increase its routes to Europe.
Fernandes said the company's shares had taken a "battering" over investors' reaction to a perceived problem of overcapacity in the industry. "There have been lots of reports out there that people are buying lots and lots of planes – most of those are coming from two airlines, from us and an airline in Indonesia – but no one has looked at the demand side," he said.