KUALA LUMPUR: AirAsia X (AAX), which looks to gain shareholders approval to take over Capital A Bhd's aviation business for RM6.8 billion, today said the enlarged aviation group will benefit from centralised decision-making and more coordinated network plans and better economies of scale.
The deal will see seven AirAsia-branded airlines under one roof.
The seven are Malaysia AirAsia, Thai AirAsia, Philippines AirAsia, Indonesia AirAsia, AirAsia Cambodia, Thai AirAsia and Thai AirAsia X.
AirAsia X said the move will consolidate all airline entities operating under the AirAsia brand, covering a full spectrum of short, medium and long-haul low-cost air transportation services, with domestic flights and international flights.
"Each airline holds its respective airline operator certificates and these airline operator certificates will continue to be held separately by different entities within the new aviation group as each airline focuses on different destinations and flight routes which cater to the travelling needs from different groups of customers," it said.
The company said the proposed acquisitions offer shareholders an opportunity to own a stake in the new aviation group, particularly as the company anticipates a recovery in international air traffic following the COVID-19 pandemic.
"The proposed acquisitions will allow our company to consolidate the assets and liabilities as well as earnings of all the abovementioned airlines entities operating under the AirAsia brand, including AirAsia X," it added.
In a more than 700-page circular to shareholders, the airline said the move to house all seven AirAsia-branded airlines under one enlarged aviation group will further optimise its fleet management and utilisation.
It said with a centralised leadership and management, wet lease arrangements can be entered into between the airlines within the group with greater flexibility and efficiency, helping to increase the cross utilisation of aircraft across the airlines within the enlarged group.
The scheduling and deployment of aircraft can be arranged based on prevailing market demand to achieve optimal passenger loads.
This is in order to offer competitive flight ticket pricing while achieving reasonable profitability margin.
For example, using narrowbody aircraft with a smaller passenger capacity for non-peak seasons / new routes with uncertain take-up rate and widebody aircraft with a larger passenger capacity for peak seasons / routes which have matured) as well as potentially capture a higher market share for air travel within the Southeast Asia and Asia Pacific regions.
The seven airlines collectively have an order of about 400 aircraft from Airbus, with scheduled delivery commencing from 2024 up until 2035.
It said over the next 3 years, the airlines within the enlarged aviation group will focus on increasing their flight frequencies and expanding their fleet of aircraft accordingly to capture the growing demand for air travel and maintain their positions as one of the market leaders in the respective regions where the airlines operate in.
AirAsia X will hold its extraordinary general meeting (EGM) on Oct 16, 2024, while Capital A will hold its EGM on Oct 14 where the proposed disposal of its aviation business to sister company AirAsia X will be tabled for shareholders' approval.
Capital A is looking to exit its Practice Note 17 status with the deal.
AirAsia X traded unchanged at RM1.60 a share earlier, while Capital A was down 1.66 per cent to 89 sen a share.