Capital A’s CEO announced that there will be no AirAsia airline merger

AirAsia X will be renamed AirAsia Aviation Group, and will take ownership of the six other airlines.

After weeks of discussing and making headlines about the merger of all of AirAsia’s airline businesses into one new entity, Capital A’s Chief Executive Officer Tony Fernades has announced that there will be no merger. Instead, all airline businesses will be injected and listed as one existing structure but will continue to operate separately.

For quite a while now, Capital A’s aviation companies – which include AirAsia Malaysia, AirAsia Thailand, AirAsia Philippines, AirAsia Indonesia, and AirAsia X – have been in a financial predicament. Through discussions and analysis, Capital A decided to merge its airlines with AirAsia X in an effort to avert a potential stock market delisting.

During the filing made almost a week ago, Capital A mentioned that AirAsia X would acquire the AirAsia arms serving Malaysia, Thailand, Indonesia, and the Philippines to form a new consolidated aviation group known as AirAsia Aviation. Capital A and AirAsia X were to submit their business restructuring plan, including the airline consolidation, by January 2023. The restructuring plan was scheduled to be implemented by July of next year.

This was the plan that everyone had expected. However, in quite a surprising turn of events, Capital A’s Tony Fernandes, who also happens to be the former Chief Executive Officer of AirAsia Malaysia, said there would be no merger happening. The airlines under Capital A would instead be under AirAsia X’s listing status on the stock market.

As for AirAsia X, the low-cost long-haul carrier will be renamed AirAsia Aviation Group and will own the six different airlines. Fernandes explained:

“There’s no merger. We’re just injecting AirAsia Group airlines into AirAsia X’s listing status. It’s just like the International Airlines Group (IAG). IAG owns British Airways, Iberia, and Aer Lingus. So, AirAsia Aviation Group will own AirAsia Malaysia, AirAsia Thailand, AirAsia Indonesia, AirAsia Philippines, AirAsia X Malaysia, and Thai AirAsia X.”

So, what will the operations be like if AirAsia X becomes AirAsia Aviation Group that owns six airlines? Concerning this, Fernandes reassures that each of these six airlines’ short- and medium-haul flight operations will continue to operate individually as usual, even under one single entity.

While the six airlines will continue to operate separately, Fernandes hints that the AirAsia Aviation Group will have approximately 225 aircraft operated by each carrier after the consolidation. And moving forward, the aviation company will receive new Airbus A321 aircraft. However, it is unsure if the new additions will come from AirAsia’s order book, which currently consists of about 326 of the Airbus narrowbody.

Overall, it will be interesting to witness the eventual path that AirAsia Aviation Group will take. In some respects, the aviation company will be similar to IAG with the intake of international airlines, albeit they all hail from a similar name. The other difference is that IAG consists of a varied mix of national and low-cost carriers, whereas AirAsia Aviation Group will only consist of low-cost carriers.

Will AirAsia Aviation Group take in other airlines in the future, or will it remain purely for these six airlines? And it would also be curious to see if, down the flight path, the aviation company will branch out a cargo division, but only time will tell. For now, it seems AirAsia Aviation Group will likely be started from July onwards next year. simpleflying.com