Capital A and AirAsia X agree on formation of AirAsia Aviation Group

Capital A and the AirAsia Group, a newly incorporated entity, has signed an agreement for ‘Capital A’s strategic divestment and AirAsia Group’s strategic acquisition of its aviation businesses’. This milestone agreement is ‘expected to catalyse AirAsia to its next growth phase to become the world’s first low-cost network carrier’, conglomerating existing airline subsidiaries into one united business. The divestment of the AirAsia Group (including its subsidiaries in Thailand, Indonesia, the Philippines and Cambodia) will be fulfilled through the issuance of new AirAsia Group shares to Capital A worth RM3 million ($0.62 million). After the proposed divestment is completed, Capital A is expected to retain 18.39% of the enlarged issued shares of AirAsia Group. AirAsia Malaysia will also be divested for RM 3.8 million ($0.79 million) through the assumption of AirAsia Group’s assumption of debt owed by Capital A to AirAsia. “We wholeheartedly welcome the strategic acquisition,” explained CEO of AirAsia X (which was created in 2007 to capture the medium-haul market). “The ‘one airline’ strategy accelerates our journey, leveraging existing routes, approvals, and slots for rapid expansion.” He added that “the proposed exercise offers AirAsia X a growth lifeline leveraging Capital A’s aircraft order book of almost 400 aircraft with an ongoing delivery timeline up to 2035”. ‘This investment grants [AirAsia X shareholders] ownership in a mature and ongoing airline business operation, comprising four established airlines that collectively form Asean’s most extensive short-haul network, consolidating AirAsia Group’s position as the largest low-cost carrier in Asean,’ explains AirAsia. Capital A shareholders will also maintain ‘direct ownership in the combined aviation business, ensuring access to future growth opportunities. “Our driving motivation has been to unlock and realise value for our shareholders, though we also remain steadfast in our commitment to emerge successfully from PN17,” concluded CEO of Capital A and advisor to the newly formed AirAsia Aviation Group, Tony Fernandes.