AirAsia X Set to Acquire AirAsia and AirAsia Aviation Group in Strategic Consolidation

AirAsia X Berhad (AAX), operating as AirAsia X, is poised to acquire 100% stakes in both AirAsia (AAB) and AirAsia Aviation Group (AAAGL). This major move comes as AAX entered a non-binding acceptance letter with Capital A, the current owner of these entities. The acquisition signifies a strategic consolidation within the AirAsia brand, leveraging AirAsia X’s robust financial recovery in 2023 and the recent lifting of the Bursa Malaysia PN17 notice.

AAB is the operator of AirAsia, while AAAGL oversees AirAsia’s operations outside Malaysia, including Philippines AirAsia, Indonesia AirAsia, and the upcoming AirAsia Cambodia. Capital A’s CEO Tony Fernandes explained that this sale will allow the parent company to concentrate on non-aviation businesses. Notably, Fernandes will maintain significant stakes in AirAsia and AirAsia X through other investment channels.

The agreement will result in a merger of AirAsia, Indonesia AirAsia, Philippines AirAsia, and AirAsia Cambodia under the AirAsia X brand. This marks a strategic shift for AirAsia X from focusing solely on medium and long-haul flights to offering services across all flight durations.

As of January 8, 2024, AAB’s issued share capital stands at MYR 2,515,438,408 (USD 542 million), with AAAGL’s at USD 5,270,000. Both entities are wholly owned by Capital A. This acquisition is expected to enhance synergy between the airlines, leading to a more focused management approach and strategic direction. It is also anticipated to increase market share, unlock new growth opportunities, and improve profitability through cost-effectiveness and stronger negotiation leverage due to economies of scale.

The future AirAsia X entity, post-acquisition, will boast a fleet of over 200 aircraft and serve more than 160 destinations. Additionally, AAB and AAX have a combined total of around 300 aircraft on order, with AAB actively involved in aircraft leasing.

Details of this agreement will be further elaborated in the definitive agreement, which is yet to be signed. In a separate but related development, Fernandes has announced his intention to retire from the CEO position of Capital A by 2028, after over two decades of leadership.