Proposes formation of a regional aviation powerhouse amidst growing Asia-Pacific travel demand

 SEPANG, 25 September 2024 - AirAsia X (AAX) has issued a detailed circular to its shareholders, providing an in-depth view of the Company’s Proposed Acquisitions of Capital A Berhad’s entire equity interest in the aviation business in AirAsia Aviation Group Limited (AAAGL) and AirAsia Berhad (AAB) for RM6.8 billion. 

The Proposed Acquisitions represent a pivotal step in consolidating the award-winning AirAsia brand's low-cost carriers into a unified aviation group with a strengthened financial position. This strategic move aims to create a focused aviation powerhouse encompassing seven airlines across Malaysia, Thailand, Indonesia, the Philippines, and Cambodia. 

Upon completion of the transaction, the new aviation group will cover the full spectrum of short, medium, and long-haul air travel services to capitalise on growing travel demand. Passenger traffic in the Asia Pacific is expected to increase by 17.2% in 2024, according to IATA. 

The Proposed Acquisitions enable the formation of a revitalised, future-proofed aviation group, further boosted by the delivery of around 400 new Airbus aircraft over the next decade. This will ensure that AirAsia remains ahead of competitors in fleet expansion and market share. These new aircraft deliveries are expected to fuel sustained growth in both existing and emerging markets, providing the airline group with the flexibility to meet evolving travel trends across Asean, China, India, Australia, and beyond.

Dato' Fam Lee Ee, Chairman of AirAsia X said: “The Proposed Acquisitions are a turning point in our strategy to create long-term value for our shareholders. The consolidation of all AirAsia-branded airlines under one group will create powerful synergies, enhance fleet management, and allow us to capture a larger share of the growing air traffic, both regionally and globally. This positions us for stronger future profitability while maintaining our focus on delivering low-cost, high-quality air travel.

“For our shareholders, who are crucial to this transformation, this move unlocks significant opportunities and serves as a platform for shareholders to gain access to a matured group of airlines, with a proven track record of profitability. With the enlarged airline group, AAX will gain stronger leverage to secure competitive deals, expand into new markets, and drive sustainable growth for its future. This marks a key moment where shareholders can directly reap the benefits of synergies and enhanced operational efficiencies from the Proposed Acquisitions.”

Benyamin Ismail, CEO of AirAsia X said: “This corporate exercise strengthens our competitive edge and allows us to capture growing demand in the aviation sector. Our shareholders stand to benefit from this by being part of a more resilient and agile aviation group, ready to adapt and thrive in a rapidly recovering international air travel market.

“AAX will also gain significant advantages by leveraging the broader Capital A’s ecosystem, which includes everything from digital services and ground handling to in-flight offerings. These synergies will help the new aviation group operate more cost-effectively. The Proposed Share Capital Reduction, another key element of the Proposals, will eliminate accumulated losses, thus enhancing AAX’s financial profile.”

“Beyond reinforcing AirAsia's leadership in the low-cost segment, we are committed to being an innovator in the aviation market, setting new benchmarks in operational efficiency and customer service. We believe these Proposed Acquisitions will ultimately benefit both our shareholders and customers as we move forward.”

The Circular, now available on AAX’s website, provides further details on the proposals, including the Proposed Issuance of Free Warrants, Proposed Private Placement, Proposed AAAGL Acquisition, Proposed AAB Acquisition, Proposed Share Capital Reduction and Proposed Granting of Subscription Options. Shareholders are encouraged to review the document ahead of the forthcoming Extraordinary General Meeting (EGM) scheduled for 16 October 2024.