Capital A merges AirAsia and AirAsia X as part of restructuring plan

Malaysia’s Capital A has invested in Tony & Co. as part of a corporate restructuring aimed at merging AirAsia’s low-cost airline business with long-haul AirAsia X and abandoning its status as a financially distressed company. Fernandez, CEO, said.

Capital A, led by Fernandez, will retain its digital, logistics and air services businesses, while AirAsia X will be renamed AirAsia Aviation and will be led by longtime executive Bollingham under the scheme. Capital A hopes to submit to Bursa Malaysia Securities for approval in February.

Pandemic-loss Capital A was classified as a ‘Practice Note 17’ or PN17 by the Malaysian Stock Exchange in January. PN17 companies may be delisted if they fail to normalize their finances within a set period of time.

AirAsia X is also classified as PN17, but in an interview with Reuters on Tuesday, Fernandez said both listed companies will exit that status by July 2023 under a restructuring plan. X, giving them exposure to pure aviation business with multiple brands.

“We saved it from what looked like a very sick airline,” he said of AirAsia, which grounded most of its aircraft during the pandemic. has been resurfaced and listed as a separate listed vehicle.”

Fernandez said AirAsia’s aviation business will probably raise capital in parallel with a dual listing in the US or elsewhere in Asia, and growth, such as setting up new airlines in places such as Vietnam and Cambodia. pursue opportunities.

Meanwhile, Capital A could list its aviation services business, including maintenance and catering, in Singapore, where rivals such as Singapore Technologies Engineering and SATS can serve as comparable companies, he added.

Fernandez said AirAsia expects 140 of its 205 aircraft to return to service by the end of the year, as it faces maintenance capacity bottlenecks after more than two years of grounding. This is down from the August estimate of 160 aircraft.

Capital A will report its third quarter results on Wednesday. Fernandez said the recent drop in oil prices and a stronger local currency are helping improve the company’s outlook.

Capital A’s share price is down 25% year-to-date, trailing competitors with stronger balance sheets such as Singapore Airlines and Cathay Pacific, which have risen 9% and 21% respectively.

Fernandez said the company’s financial difficulties had eroded investor confidence and had a “huge impact” on the airline’s share price, and he hopes to restore confidence through restructuring plans.