Capital A to merge Air Asia X with remaining Air Asia airlines  

Miquel Ros // AeroTime

Tony Fernandes, CEO of Capital A, the parent company of Air Asia, has announced the group is divesting from the two companies that control Air Asia’s short-haul airlines, AirAsia Berhad, which operates out of Malaysia, and AirAsia Aviation Group, which includes airlines operating under the Air Asia brand in Thailand, Indonesia, the Philippines and Cambodia.  

The news was announced during a press conference held in Kuala Lumpur on January 8, 2023.  

The two companies will be acquired by Air Asia X, the group’s long-haul, low-cost airline, in order to create an integrated airline business. 

While Capital A will focus on developing the group’s other businesses in digital retailing, cargo handling and aviation services, the merged airlines will pool fleets to continue their expansion in its ASEAN home markets and beyond. 

During the press conference, Fernandes highlighted his vision to operate a multi-hub network that stretches to Europe, America, and Africa, in addition to its already important presence in Asia. 

By pooling the different Air Asia airline fleets, it will enable the combined airlines to operate a mixed fleet of A330 widebody aircraft and A321 narrowbodies, which will alternate on short, medium and long-haul routes. Ultimately the Air Asia X brand will be phased out, as all the airlines will operate as Air Asia. 

Fernandes also explained how the A321XLRs on order will allow Air Asia to establish new routes and expand into new markets, such as Central Asia and second and third tier cities in Asia. The A330s will be deployed on shorter routes within the ASEAN region to add capacity on high demand routes to airports with capacity constraints. 

While few details were provided regarding the new routes and destinations, Fernandes mentioned Chittagong, Bangladesh (CGP) and an unnamed destination in Africa as possible new destinations for Air Asia in the first months of 2024. 

Under the envisaged multi-hub structure, Fernandes explained, the different Air Asia bases could take on a specific geographic focus. He mentioned specifically how Manila (MNL) could be well positioned as a springboard to fly to the US West Coast, although he admitted it would require sourcing longer range aircraft such as the A350. He also noted that Bangkok (BKK) would make a great base for Europe-bound flights and Kuala Lumpur could serve destinations in Africa, a continent where Fernandes sees much potential for growth. 

Fernandes’ goal is to retire by 2028, by which time Air Asia is expected to be operating a combined 333 aircraft.  

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