Malaysia conglomerate to sell budget carrier to AirAsia X

Kuala Lumpur, Malaysia Tue, January 9, 2024

In an effort to streamline operations, Malaysian conglomerate Capital A announced on Monday that it intends to sell its low-cost airline AirAsia to its medium-haul partner AirAsia X. The non-binding agreement said that AirAsia X would merge with AirAsia Malaysia and AirAsia businesses in Cambodia, Thailand, Indonesia, and the Philippines.

According to Capital A CEO Tony Fernandes, the new company will manage short-, medium-, and long-haul flights, freeing up the conglomerate to concentrate on its non-aviation operations. “We are going to merge the two airlines and double passenger traffic to 200 million (per year) from about 80 to 90 million currently,” Fernandes stated. AirAsia X operates 17 A330s, whereas AirAsia has 166 A320 and A321 aircraft in its fleet.

Fernandes stated that the combined airline would begin operating new routes in 2025 to destinations such as India, Africa, Kazakhstan, and North and South America. He also declared that he would be leaving Capital A in 2028.

“I’ve been doing this for twenty-two years. “This is the ideal moment to retire,” he declared. “Leadership is about knowing when to step aside.” Although the merger was “natural,” Shukor Yusof, an analyst with Singapore-based Endau Analytics, told AFP that it might be a harbinger of a decline in the aviation industry in the area.

Flamboyant former music business executive Fernandes revolutionized the aviation market in Southeast Asia by launching AirAsia as a low-cost carrier to smaller cities, thereby igniting a wave of competition. When AirAsia X was first introduced in 2007, it had grand plans to run long-haul routes, including those to Europe. However, because to growing expenses, it ceased operating to London and Paris in 2012 and instead concentrated on its key markets, which were China, Japan, and Australia.

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