Capital A’s PN17 Exit Paves Way for AirAsia Merger

Bursa Malaysia has approved Capital A’s regularisation plan, a major milestone that paves the way for the company to exit PN17 status and spin off its various AirAsia-branded airline assets. Capital A confirmed the approval in a regulatory filing on March 7, 2025. At a media briefing on March 10, CEO Tony Fernandes described the approval as a very big step toward setting up AirAsia Group, and he outlined his future plans to consolidate his airline interests.

Capital A, along with other investment vehicles linked with Fernandes and his business partner Kamarudin Meranun, holds controlling stakes in AirAsia, AirAsia X, and Thai AirAsia X. In addition, they have stakes in and manage operations of Thai AirAsia, Indonesia AirAsia X, Philippines AirAsia, and AirAsia Cambodia via AirAsia Aviation Group, which is under Capital A’s control. Fernandes now plans to call an extraordinary general meeting of shareholders to approve the regularisation plan. The company will then proceed to Malaysia’s High Court to secure approval for a proposed capital reduction plan. Once completed, Fernandes hopes Capital A will exit PN17 status by late May.

Bursa Malaysia issues a Practice Note 17 (PN17) to companies that are considered to be in financial distress. Capital A was placed under PN17 in January 2022 and has been required to submit a regularisation plan to maintain its listing status. With the lifting of PN17, Capital A will consolidate its airline interests. Fernandes explained that AirAsia X will be buying AirAsia from Capital A, although Capital A will still own 18% of AirAsia X, which in turn will own both AirAsia X and AirAsia X Thailand. This consolidation repackages Fernandes’ control over his airline interests rather than reducing it.

The disposal of Capital A’s aviation interests is subject to four conditions. These include obtaining consent from bankers and lenders—which Fernandes expects to be in place by the end of the week—the approval of the Stock Exchange of Thailand, anticipated within the next week or two, the completion of a MYR1 billion placement, which has already been completed, and finally the transfer and issuance of shares. Once these conditions are met, AirAsia Berhad, the operator of AirAsia, and AirAsia Aviation Group, which runs the other short-haul AirAsia carriers, will fall under the control of AirAsia X. Fernandes stated that once this process is complete, he plans to merge AirAsia X and AirAsia into one airline, since the fleet now includes the appropriate aircraft, such as the A321-200NX(LR) and A321-200NY(XLR). This consolidation means there is no longer a need to maintain two separate airlines.

Fernandes also addressed immediate operational improvements. He noted that Capital A is working to return 16 parked aircraft to service, a situation caused by supply chain issues with General Electric engines. He expressed hope that all 16 aircraft would be back in the air by May or June. He further explained that different aircraft types will serve various routes: neos can fly for about six hours, long-range aircraft for seven to eight hours, and the XLRs for ten hours. Most flights will be conducted with narrowbodies, while A330s will be used for routes to Europe and North America.

Fernandes concluded by stating that this year is about maximizing the network. “We’d rather go to Kota Kinabalu twenty-two times a day than a destination once daily. Over the last two years, we just took routes—now we’re optimizing them.”

Related News https://suspicious-zhukovsky.67-21-117-18.plesk.page/?s=AirAsia

Sources: AirGuide Business airguide.info, bing.com, ch-aviation.com