Malaysia’s Capital A will divest its airline business to associate AirAsia X, with medium-haul and short-haul operators to be merged under a single AirAsia brand.
The deal, announced 8 January, will see AirAsia X acquire AirAsia Malaysia as well as AirAsia units in Thailand, Indonesia, Philippines as well as Cambodia, to form AirAsia Aviation Group.
Neither AirAsia X nor Capital A disclosed the financial value of the acquisition. Capital A chief Tony Fernandes, who was speaking at a briefing, says full details of the transaction will be announced in the “next few weeks”, where both parties will sign a definitive sale and purchase agreement.
FlightGlobal understands the merger is expected to be completed in five months, following shareholder and court approvals.
Capital A has previously floated the prospect of a divesting its airline businessas, but envisaged two separate airlines businesses operating under a consolidated group.
In a prepared statement, Fernandes says Capital A – which has other business units in digital, logistics and aviation services — has been speaking with “committed investors” who have “expressed a strong preference for a pure aviation play”.
He adds: “Following the disposal, the aviation business is poised to benefit from focused management and a well-defined strategic direction, which will boost the aviation business’s capacity to seize growth opportunities, expand market share, and ultimately achieve enhanced profitability.”
AirAsia X says the “groundbreaking acquisition” builds on its “robust recovery trajectory” after it successfully shed its financially distressed status in November last year.
Airline chair Fam Lee Ee adds: “Leveraging the strengths of all airlines under the AirAsia brand, we are poised to create a pure-play entity that propels us forward. The synergy created…represents more than just a financial consolidation; it symbolises our role as a trailblazer in shaping the future of the aviation industry.”
The consolidated airline is likely to have a fleet of over 300 Airbus aircraft by 2028, says Fernandes, comprising a mix of A321s and A330s widebodies.
AIRASIA BEEFS UP LEADERSHIP TEAM
Separately, AirAsia Aviation has appointed two deputy CEOs, beefing up its senior leadership team as it works through the integration of operations.
Assuming the role of deputy CEO for operations, Chester Voo will oversee airline operations, including “optimising and enhancing efficiencies”, as well as “identifying and mitigating potential risks to improve the airline’s overall performance”, says AirAsia.
Voo was most recently the head of the Civil Aviation Administration of Malaysia, and was with AirAsia for 11 years before that.
AirAsia also appointed Farouk Kamal to be in charge of the airline’s corporate functions, including finance, leasing and investor relations. Farouk was a member of the AirAsia X board, before stepping down in mid-December.
He was also the CEO and investment chief of government-linked investment company Urusharta Jamaah
AirAsia Aviation group chief Bo Lingam says: “As we enter a new era, these leadership appointments signify a significant milestone in the airline’s evolution, steering AirAsia through an era of digital transformation, innovation, and sustainable growth.”
Fernandes of Capital A says more details on the newly-merged carrier’s leadership structure will be disclosed once the deal is closed.
