By (Reuters) – Shareholders have backed plans for budget carrier AirAsia to be bought by its long-haul associate, AirAsia X, paving the way for the Malaysian-based airlines to finalise their consolidation by the end of the year.
AirAsia X shareholders approved the proposed acquisition of Malaysian investment firm Capital A’s equity interest in AirAsia units for 6.8 billion Malaysian ringgit ($1.6 billion) on Wednesday, after Capital A shareholders gave the nod on Monday to the deal, company statements said.
The merger of AirAsia is intended to create efficiencies and aid a significant expansion of routes and global network reach, AirAsia executives have said.
AirAsia operates short-haul routes around Asia with single-aisle aircraft while AirAsia X flies wide-body planes on longer routes including to Australia and Saudi Arabia.
The creation of an enlarged AirAsia Group remains subject to final court and regulatory approvals.
AirAsia was founded in 2001 with two aircraft and has since become one of Asia’s largest budget airline operators with a fleet of some 200 planes serving markets across SouthEast Asia, India and China.
Both Capital A and AirAsia X were hard hit by pandemic travel restrictions and classified by Malaysia’s stock exchange as PN17, or financially distressed. Such firms may be de-listed from the exchange if they fail to stabilise their finances within a set time frame.
AirAsia X was removed from PN17 status a year ago.
Capital A CEO Tony Fernandes said on Monday the disposal of AirAsia Berhad and AirAsia Aviation Group, which includes AirAsia units in Thailand, Indonesia, Philippines, and Cambodia, will pave the way for Capital A’s restructuring and exit from PN17 status.
($1 = 4.2990 ringgit)