2024 could see the creation of a mega airline on the Asian continent, a player that would be the equivalent of a few American or Chinese behemoths. This is what the CEO of Capital A Bhd, Tony Fernandes.
Capital A Bhd is the holding company which brings together - in a nutshell - all the AirAsia airlines. These are AirAsia Bhd (Malaysia), Thai AirAsia, Indonesia AirAsia, Philippines AirAsia and the future AirAsia Cambodia.. There are also two long-haul subsidiaries, AirAsia X and Thai AirAsia X.
The fleet currently in service comprises 218 devices. In the future, this fleet should double to 400 aircraft.
A first pan-ASEAN company
A merger with a single management team and a single strategy makes sense, as it would give the company considerable clout.. According to Tony Fernandes, the merger of the carriers would take place under the AirAsiaX (AAX) entity and - if approved by the shareholders of the various subsidiaries - would make it possible to create the first pan-ASEAN companythe Association of Southeast Asian Nations.
Except that legislation will have to be changed in each country where AirAsia has a subsidiary. Because, whether in Thailand or Indonesia, the main shareholder must be local.. This means that the AirAsia Group may only hold a maximum of 49% in the share capital of Indonesia AirAsia or Thai AirAsia. In the Philippines, AirAsia has a stake of only 40%... Only the Cambodia allows a foreign company to have a majority shareholding.
Creating a single company with a single structure will therefore necessarily result in a compromise with the shareholder base. One likely solution would be to give an equal share to the shareholders of each country concerned. This would mean creating a special status for the future global entity. AirAsia Aviation (in place of AirAsiaX).
The CEO of Capital A Bhd, Tony Fernandes, met the Thai Prime Minister, Srettha Thavisin, on 10 January to discuss the issue of foreign ownership limits for airlines in the Kingdom. He is due to repeat the exercise in Indonesia and the Philippines.
" How long will this process take? Probably three or four months, maybe five" said Tony Fernandes at a press conference on Monday 8 January. And obviously even more time than in his initial assessments.
In fact, after his meeting with the Thai Prime Minister, the AirAsia Group CEO stated that the first merger would involve the two Malaysian subsidiariesprobably followed by Thailand.
But This merger of all AirAsia's subsidiaries is in line with history. It would also prove thatASEAN is more than an association in words alone.
(Updated on 15/01/2024)
