Malaysia’s budget airline 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 MYR 6.8 billion ($1.65 billion).

AAX said in a statement on Wednesday that 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.

It noted 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 capitalize on growing travel demand.

Cited International Air Transport Association (IATA), AAX also highlighted that passenger traffic in the Asia Pacific is expected to increase by 17.2 percent in 2024.

According to the statement, the proposed acquisitions enable the formation of a revitalized, 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, AAX noted.

It also said 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.

“The proposed acquisitions are a turning point in our strategy to create long-term value for our shareholders,” said Fam Lee Ee, Chairman of AAX.

According to him, the consolidation of all AirAsia-branded airlines under one group will create powerful synergies, enhance fleet management, and allow them to capture a larger share of the growing air traffic, both regionally and globally.

He noted this positions them for stronger future profitability while maintaining their 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,” he said.

With the enlarged airline group, he opined that 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,” he added.

Benyamin Ismail, Chief Executive Officer of AAX, said this corporate exercise strengthens their competitive edge and allows them 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,” he said.

He also noted 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.

He opined that these synergies will help the new aviation group operate more cost-effectively.

He also said 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,” he added.

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