Folding the AirAsia and AirAsia X brands into a single corporate entity may take several years to finalise, according to Tassapon Bijleveld, the executive chairman of Thai AirAsia (FD, Bangkok Don Mueang) and Thai AirAsia X (XJ, Bangkok Suvarnabhumi). He says the planned merger cannot close until Thai AirAsia X wraps up its rehabilitation process.

Last week, AirAsia X (AAX) told the Malaysian bourse that it had signed a non-binding letter of intent to acquire AirAsia (AAB) and AirAsia Aviation Group (AAAGL) from Capital A. AAX plans to merge the airlines operated by AAB and AAAGL into a single business.

AAB operates AirAsia (AK, Kuala Lumpur International) while AAAGL owns and operates AirAsia Cambodia, Indonesia AirAsia, AirAsia Philippines, and Thai AirAsia in conjunction with local partners.

However, the executive chairman of Thai AirAsia and Thai AirAsia X told The Nation newspaper late last week that those two entities may continue to operate under their present ownership structure until as far out as 2027.

"The merger of two airlines in Thailand may have to wait two to three years until Thai AirAsia X leaves the business rehabilitation plan, which should happen around late 2025,” Tassapon Bijleveld said. Thai AirAsia entered into bankruptcy protection in May 2022, at the time saying doing so would allow it to manage better debts incurred earlier in the pandemic.

AAX already owns 49% of Thai AirAsia X, with the remainder in the hands of Thai investors. However, the buyout would see AAAGL's 43% stake in Thai AirAsia go to AAX. External Thai-based investors also hold a 38% stake on Thai AirAsia, while the airline's board and management, including Bijleveld, hold the remaining 19%.

AirAsia founder and CEO of Capital A, Tony Fernandes, says the decision to divest its airline businesses "makes complete sense." Fernandes will retain significant direct and indirect stakes in the AirAsia carriers via his other investment vehicles. He is also optimistic the Thailand-based AirAsia brands have a big future. He wants to turn Bangkok into a hub for AirAsia operations into Europe. "We want to make Bangkok the next Dubai in terms of being a global aviation hub," he said last week.