Tony Fernandes, CEO of Capital A, has announced an agreement for the divestment of its airline business and the acquisition of AirAsia X, forming a unified AirAsia Group. The acquisition, valued at approximately MYR6.8 billion ($1.4 billion), positions AirAsia as the largest low-cost airline group in Asia. This move comes after Fernandes announced plans for AirAsia Move to become the biggest online travel agency in Southeast Asia. The completion of the acquisition, expected by the end of September pending approvals, will result in the delisting of AirAsia X, with the new entity assuming its listing through a share swap and Capital A retaining 18.39% of AirAsia Group’s expanded issued shares.
Fernandes revealed that the new AirAsia Group will primarily operate narrow-body aircraft in order to expand into new destinations and underserved routes. He emphasized the benefits of merging Capital A’s order book of 362 aircraft with AirAsia X’s diversified portfolio of traffic rights. This unified fleet aims to connect Southeast Asia with global destinations such as Europe, Africa, Central Asia, and North America, ultimately reducing trip costs by 30% and simplifying operations. The new-generation Airbus aircraft enabled this merger by providing increased range and efficiency, making it the missing piece in AirAsia’s plan to bring together all its airlines under a single umbrella.
Bo Lingam will lead the new AirAsia Group as CEO, with Fernandes taking on an advisory role. Lingam highlighted the simplified fleet structure and the extended range capabilities of the Airbus aircraft, allowing AirAsia to explore new destinations and underserved routes. The ambition is to rival global giants with a profitable, low-cost network spanning the globe. Benyamin Ismail, CEO of AirAsia X, emphasized the potential of the “Online Airline” strategy to leverage existing routes, approvals, and slots for rapid expansion. Fernandes also announced his decision to continue as CEO for another five years, setting aside his retirement plans.
AirAsia has emerged as one of the bidders for Sri Lanka’s national carrier, SriLankan Airlines, showcasing the airline’s interest in expanding in the South Asian region. This strategic move aligns with Fernandes’ goal to position AirAsia as the largest low-cost airline group in Asia. The acquisition of AirAsia X and the formation of a unified AirAsia Group mark a significant step towards achieving this goal. The company’s focus on operating narrow-body aircraft, leveraging the new-generation Airbus fleet, and simplifying operations demonstrates its commitment to growth and innovation in the aviation industry. With a strong leadership team in place, AirAsia is poised to compete with global giants and create value and innovation across its various business verticals.
