AirAsia X Berhad (AAX) dba AirAsia X will acquire 100% stakes in AirAsia (AAB) and AirAsia Aviation Group (AAAGL) following AAX entering into a non-binding acceptance letter with their present owner, Capital A.

AAB operates AirAsia, while AAAGL operates the AirAsia brands based outside Malaysia, including Philippines AirAsia, Indonesia AirAsia, and the AirAsia Cambodia startup. Capital A CEO Tony Fernandes told outlets that the sale would allow that entity to focus on non-aviation businesses. The choice of AirAsia X as the acquisition vehicle reflects its rapid financial recovery in 2023 and the recent lifting of the Bursa Malaysia PN17 notice. Via his other investment vehicles, Fernandes retains significant stakes in the AirAsia and AirAsia X airlines.

Under the terms of the agreement, AirAsia, Indonesia AirAsia, Philippines AirAsia, and AirAsia Cambodia would merge into the AirAsia X brand, which, instead of focusing exclusively on medium and long-haul operations, would provide flights across all sector lengths.

According to the January 8, 2024, Bursa Malaysia filing, AAB's issued share capital is MYR2,515,438,408 ringgits (USD542 million), comprising 3,341,974,080 ordinary shares. AAAGL has an issued share capital of USD5,270,000 comprising 5,270,000 ordinary shares. Both entities are wholly owned by Capital A.

"The proposed acquisitions are expected to enable the already-present synergy between all the airlines to be further enhanced with a more focused management with a much distilled strategic direction, which in turn will boost the company’s market share leadership and open up next-level growth opportunities," the filing reads.

"A consolidated group of airline businesses is also envisioned to register further cost-effectiveness attributable to a streamlined decision-making structure and fortified leverage in contracts negotiations through economies of scale, ultimately presenting a sounder ground for profitability."

Pending further aircraft arrivals, the future AirAsia X entity would contain over 200 aircraft and fly to more than 160 destinations. AAB and AAX also have a combined total of around 300 aircraft on order, and AAB is active in the aircraft leasing space.

AAX says further details will accompany the yet-to-be signed definitive agreement.

Separately, Fernandes also said he would step down from the Capital A CEO's role, albeit not until 2028. "I have been doing it for 22 years," he said. "It is the right time to retire."