AirAsia X To Be Renamed AirAsia From Jan. 19, Founder Says

AirAsia X Bhd. will be renamed AirAsia from Jan. 19 as the low-cost carrier moves to consolidate all its aviation operations under a single brand, according to founder Tony Fernandes.

The rebranding follows the completion of a $1.7 billion acquisition of short-haul aviation businesses from sister company Capital A, a step aimed at streamlining the group's operations. Fernandes emphasized that the new structure will unify the group into a single airline brand, simplifying operations and management.

Capital A, the parent company, will also apply for removal from its PN17 classification for financially distressed firms on Jan. 19. This move is part of a six-year restructuring process that will transform it into a non-aviation holding company.

Why Did This Happen?

AirAsia X is currently the only long-haul carrier within the group. By acquiring short-haul operations from Capital A, the airline is consolidating all aviation assets under the AirAsia brand, reducing complexity and overhead.

The move is part of a broader strategy to improve efficiency and reduce costs. Fernandes said new aircraft orders will help lower operating expenses and boost profitability. The airline's goal is to achieve a 30% margin on EBITDA (earnings before taxes, depreciation, and amortization) and significantly increase shareholder value.

How Did Markets React?

Investor sentiment around AirAsia has been cautious in recent years due to financial challenges. However, the restructuring is seen as a turning point that could stabilize the company's finances. Fernandes said the group plans to host investor roadshows in the coming months to highlight the new direction.

Capital A's removal from the PN17 list is expected to attract new investors and restore confidence in the group's financial health. The company said it will focus on five core non-aviation businesses: MRO, logistics, OTA, F&B, and branding.

What Are Analysts Watching Next?

Analysts are watching whether the restructuring will lead to improved financial performance. AirAsia's goal of doubling its stock price is ambitious, but achievable if cost reductions and margin improvements materialize.

The airline will also be under scrutiny for its ability to manage the transition without operational disruptions. The shift to a unified brand and a more focused business model is expected to take several months to fully implement.

Fernandes said the group is finalizing plans to increase transparency and engage more directly with investors. This includes hosting an investor day after the close of the fourth quarter to provide a clearer picture of the group's financial position.

The restructuring of AirAsia and Capital A is part of a broader trend in the airline industry, where companies are increasingly consolidating operations to improve efficiency and reduce costs.

As the industry continues to navigate economic and geopolitical challenges, successful restructuring efforts like AirAsia's could serve as a blueprint for other airlines seeking to strengthen their balance sheets and improve profitability.