Kuala Lumpur – AirAsia X is preparing to restructure between US$500 million and US$600 million in debt after completing the acquisition of the short-haul aviation operations of Capital A, according to Deputy Group Chief Executive Officer Farouk Kamal.
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The carrier, which operates as the medium-haul affiliate of Capital A’s AirAsia brand, intends to consolidate seven airlines into a single unified entity as part of its broader restructuring strategy.
Farouk said the group is evaluating multiple refinancing options aimed at extending loan tenures, lowering interest expenses and streamlining its existing debt into one or two primary financing instruments.
Since its establishment in 2001, the AirAsia group has grown into one of Asia’s largest low-cost airline operators. However, strict travel curbs during the COVID-19 pandemic severely impacted revenue at Capital A, prompting Bursa Malaysia to classify the company as financially distressed.
By bringing all AirAsia-branded airline operations under AirAsia X, the group expects its carriers to focus more effectively on network expansion and cost efficiencies, while Capital A concentrates on restoring its financial position.
AirAsia X is also planning to resume flights to London as early as mid-year, more than ten years after it last served the British capital via Gatwick and Stansted airports. In addition, the airline launched services to Istanbul in November.
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Farouk added that the airline is developing a new hub in Bahrain to strengthen connectivity to Central Asia, the Middle East, Europe and Africa.
The carrier expects delivery of four Airbus A321LR aircraft this year, enabling it to expand operations beyond Asia. With a fleet of 255 aircraft, AirAsia X also placed an order in July for 50 Airbus A321XLR jets and secured rights to convert 20 existing orders to the single-aisle model. The airline is additionally in discussions with aircraft manufacturers regarding regional aircraft, as it considers placing further orders of up to 150 planes.
Following the consolidation, AirAsia X is targeting near-term revenue of almost US$6 billion, alongside an EBITDA margin of 20% and a passenger load factor exceeding 80%, Chief Financial Officer Low Kar Chuan said.
Low added that the airline aims to fully repay bank loans obtained during the COVID-19 pandemic — a period when government-imposed travel restrictions sharply reduced income — within the next two to three years.
-Reuters
-TheStar