Capital A has completed the disposal of its aviation business to AirAsia X, drawing a line under a six-year restructuring triggered by the COVID-19 pandemic. The move consolidates all AirAsia-branded airlines under one group, allowing Capital A to refocus on its non-aviation businesses. Overall, this step marks a pivotal reset for one of Southeast Asia’s leading airline brands.
A Long Restructuring Comes to an End
According to filings with Bursa Malaysia, Capital A’s disposal to AirAsia X Berhad was completed on January 16. The transaction transfers operations into a single platform, informally referred to as the AirAsia Group.
The deal was settled through the issuance of about $2.3 billion new AirAsia X shares to Capital A and its entitled shareholders via a dividend-in-specie. Furthermore, as part of the agreement, AirAsia X assumed $937 million in debt previously owed by Capital A to AirAsia Berhad. At the same time, AirAsia X completed a private placement of 606 million new shares, raising approximately $246.6 million.
Both the consideration shares and placement shares were listed on Bursa Malaysia’s Main Market on January 19. AirAsia Aviation Group serves as the holding vehicle for all non-Malaysian AirAsia joint ventures. This move bought international affiliates under the same corporation. Notably, the transaction follows a previous setback, after Bursa Malaysia had earlier rejected Capital A’s request for an extension on its restructuring timeline.
Capital A has separately disclosed that it sold 17 million AirAsia X shares on January 14, reducing its direct stake from 12.77% to 8.96%. Moreover, the company added how the move was required to keep its combined shareholding below the legal requirement of Malaysia’s 33% mandatory takeover threshold.
A Pivot Beyond Aviation
Capital A Chief Executive Tony Fernandes described the completion as the most challenging chapter in the group’s history.
“AirAsia will become one consolidated airline group to deliver better connections and value to our guests. At Capital A, our ecosystem… will sharpen their strategic focus and accelerate growth, while ensuring long-term sustainability, I am excited for our next journey,” he commented.
This “ecosystem” includes logistics arm Teleport, ground-handling unit ADE, food brand Santa and digital platform AirAsia MOVE. While the airline consolidation is now complete, AirAsia X has said it is still studying a potential corporate rebranding to AirAsia Group, yet no formal applications have been submitted so far.
With new airline group structures reshaping Southeast Asia, how do you think these changes will affect regional travel and competition? Tell us your thoughts in the comments below!
