AirAsia is all set to merger with AirAsia X under a new name AirAsia Aviation. The merger is a part of Capital A’s restructuring plan after the company suffered major losses during pandemic. The new airline AirAsia Aviation will be headed by Bo Lingam while the Group CEO Tony Fernandes will oversee Capital A. The proposal will likely be submitted to Bursa Malaysia Securities by February next year.
Fernandes said: "From what looked like a very sick airline, we've saved it. We are refloating it and listing it as an independent listed vehicle."
As part of the corporate restructuring, AirAsia Aviation would consider a dual listing in the United States or another Asian country and has plans on establishing new carriers in local countries, including Vietnam and Cambodia. Capital A will look at listing its maintenance and catering services in Singapore, where it would compete with the likes of Singapore Technologies Engineering (STE).
The merger is motivated in large part by Capital A's 'Practice Note 17' (PN17) status, which is applied to companies in Malaysia in financial distress. AirAsia X has also been given PN17 status, despite reporting its first net profit for three years over the last quarter.
Meanwhile, AirAsia X is making progress in formulating its Practice Note 17 (PN17) regularisation strategy following the recent extension of time granted by Bursa Malaysia Securities April 28, 2023 to submit its Proposed Regularisation Plan.
AirAsia X has engaged AmInvestment Bank Berhad, Messrs Mah-Kamariyah & Philip Koh, Deloitte Corporate Advisory Services Sdn Bhd, Messrs Ernst & Young PLT, Smith Zander International Sdn Bhd, and BDO Governance Advisory Sdn Bhd to advise on the various aspects of the plan to regularise its PN17 status.
AAX expects to announce the regularisation plan to Bursa Malaysia Securities in January 2023, followed by official submission for approval thereafter in February 2023.
AirAsia X CEO Benyamin Ismail said: “As we returned to black on the back of a robust recovery across all key metrics, we are progressing well on our regularisation strategy to uplift us from the PN17 status. The strategy being formulated is expected to entail a proposed acquisition of Capital A Berhad’s aviation arm, AirAsia Berhad (AAB) and AirAsia Aviation Group Limited (AAAGL), comprising AAAGL’s respective shareholdings in AirAsia Indonesia, AirAsia Philippines, and AirAsia Thailand. Following the acquisition, AAB, AAAGL and AAX will form a consolidated aviation group, subject to the approval of our stakeholders and relevant regulatory authorities.”
While all airlines under the consortium will remain separate about the operations, the acquisition of the short-haul airlines under one consolidated group will create synergies with Air Asia X’s mid-range operations.
Leveraging the group’s wide network of over 130 destinations will provide the opportunities to expedite the Group’s recovery after the completion of the regularisation plan, the airline said.
Capital A operates low-cost AirAsia airline along with its subsidiaries Indonesia AirAsia, Philippines AirAsia, and Thai AirAsia, coupled with medium-haul carriers AirAsia X and Thai AirAsia X.