Malaysia’s AirAsia X is aiming to restructure between US$500 million and US$600 million in debt following its acquisition of the short-haul aviation business of Capital A, Deputy Group CEO Farouk Kamal said.
The medium-haul affiliate of Capital A’s AirAsia plans to merge the group’s seven airlines under a single banner, consolidating operations to reduce costs and streamline management.
“We are looking at several refinancing initiatives to extend loan tenures, lower interest costs, and consolidate multiple debt instruments into one or two loans,” Farouk said in a Wednesday interview.
AirAsia, founded in 2001, has grown into one of Asia’s largest budget airline groups. However, pandemic-related travel restrictions severely affected its parent, Capital A, which was later classified as financially distressed by Malaysia’s stock exchange.
The consolidation under AirAsia X is intended to strengthen the airline’s operational focus and expand its network, while Capital A focuses on financial recovery. Farouk said the airline plans to resume flights to London from mid-2026, more than a decade after last operating at Gatwick and Stansted, and recently launched services to Istanbul.
AirAsia X will also establish a hub in Bahrain to improve connectivity to Central Asia, the Middle East, Europe, and Africa. This year, it expects to receive four long-range Airbus A321LR aircraft, supporting expansion beyond Asia. The airline currently has a 255-strong fleet, with 50 A321XLR aircraft on order and rights to convert 20 more, while considering an additional 150 regional jets.
Following consolidation, AirAsia X targets near-term revenue of nearly US$6 billion, an EBITDA margin of 20%, and passenger loads above 80%, Chief Financial Officer Low Kar Chuan said. Low added that the airline aims to fully repay bank loans taken during the COVID-19 pandemic within two to three years.
