Shareholders have given their approval for budget carrier AirAsia to be acquired by its long-haul partner, AirAsia X, setting the stage for the consolidation of the Malaysian-based airlines to be finalized by the year’s end.
The proposal for AirAsia X to acquire Malaysian investment firm Capital A’s equity interest in AirAsia units for 6.8 billion Malaysian ringgit ($1.6 billion) received the green light from AirAsia X shareholders on Wednesday. This decision follows the approval granted by Capital A shareholders earlier in the week, as stated in company releases.
The merger aims to streamline operations and facilitate a substantial growth in routes and global network coverage, according to statements from AirAsia executives. While AirAsia focuses on short-haul routes within Asia using single-aisle aircraft, AirAsia X operates wide-body planes for longer destinations like Australia and Saudi Arabia.
The formation of an expanded AirAsia Group is contingent upon final approvals from the courts and regulatory bodies.
Both Capital A and AirAsia X have faced challenges due to pandemic-induced travel restrictions, leading to their classification as financially distressed under Malaysia’s stock exchange PN17 categorization. Failure to stabilize their financial situations within a specified timeframe could result in delisting from the exchange, a situation AirAsia X managed to avert a year ago, but Capital A did not.
Capital A’s CEO, Tony Fernandes, expressed on Monday that the divestment of AirAsia Berhad and AirAsia Aviation Group, encompassing AirAsia subsidiaries in Thailand, Indonesia, Philippines, and Cambodia, sets the stage for Capital A’s restructuring and exit from PN17 status.
