Friday, July 19, 2024

AirAsia X Airlines Now Owns Capital A in Malaysia & 4 Others


Capital A Bhd (formerly AirAsia Group) announced that it is selling its aviation business to AirAsia X Airlines Bhd in a major strategic move. This bold step aims to streamline operations, raise capital, and unlock value for investors.

About AirAsia X Airlines

AirAsia X Airlines is Asia’s budget-friendly flying champion that took off in the skies in 1993 and transformed under Tony Fernandes in 2001 with its “Now Everyone Can Fly” motto. Today, this red-clad giant has a massive network of over 165 destinations across 25 countries, connected through Kuala Lumpur, Bangkok, Jakarta, and Manila hubs.

Primarily using Airbus A320s, AirAsia offers various fare classes and onboard options for different budgets. Famous globally for its low fares, operational excellence, and customer service, AirAsia bagged the Skytrax World’s Best Low-Cost Airline title for eight consecutive years! As it changes the ever-changing aviation landscape, AirAsia focuses on expanding its network, exploring new markets, and enhancing its digital offerings to stay ahead of the curve under the umbrella of AirAsia X.

Merging the Wings

AirAsia X Airlines is ready to take flights with Malaysia, Thailand, the Philippines, and Cambodia. The proposed sale encompasses AirAsia Malaysia and AirAsia Aviation Group Ltd (AAGL), which includes subsidiaries in Thailand, Indonesia, the Philippines, and Cambodia. This alliance under the AirAsia X banner creates a tough “aviation pure play, ” uniting long-haul and short-haul operations under a single brand.

Aims Behind This Achievements 

Capital, A CEO Tan Sri Tony Fernandes emphasized the need for additional funds to fuel the company’s ambitious expansion plans. “Gaining access to capital has been challenging due to Capital A’s PN17 status,” he explained, referring to the Practice Note 17 designation by Bursa Malaysia, which imposes stricter listing requirements on companies struggling financially. By disposing of the aviation business, Capital A aims to achieve the following:

  • Boosting Financial Strength: The company wants to secure a strong capital injection through the sale to AirAsia X Airlines.
  • Unlocking the Value: The company wants to allow non-aviation businesses within Capital A, such as Teleport (logistics), Capital A Aviation Services (maintenance, repair, and overhaul), and MOVE digital (formerly AirAsia SuperApp), to raise capital independently, creating a recognition for their basic value and potential.
  • Sharpening the Focus: They want to create a more focused shareholder base for Capital A and the newly empowered AirAsia X, driving greater clarity and unlocking further value for investors.

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Transparency and Roadmap Ahead

Fernandes assured stakeholders that a detailed sale and purchase agreement would be signed within two weeks, with the transaction amount disclosed then. Capital A will also reveal a comprehensive plan by June 30 to regularize its PN17 status with Bursa Malaysia following the completion of the aviation business sale.

This strategic move marks a significant turning point for Capital A and AirAsia X airlines. The separation of the aviation business paves the way for streamlined operations, targeted fundraising, and, ultimately, an enhanced performance for all involved parties. As Fernandes rightly stated, “This move will bring greater clarity to investments, create a more focused shareholder base, and ultimately unlock value for our shareholders.” With these objectives in mind, Capital A and AirAsia X airlines are expected to move into a new era of growth and success.

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