Shareholders of Capital A have approved the sale of its aviation business to AirAsia X (AAX) during the Extraordinary General Meeting held on October 16, 2024. This approval helps Capital A transition into a more focused, tech-driven aviation services company, divided into four key pillars: Capital A Aviation Services (CAPAS), MOVE Digital, Teleport, and the Brand AA.
Tony Fernandes, CEO of Capital A Berhad, highlighted the significance of this move for the company, calling it “a watershed moment.” He added, “This clarity will benefit both shareholders and customers, allowing us to redefine the future of travel in the region.” The separation of the aviation business from its support services brings greater efficiency, profitability, and improved shareholder returns.
This shift will allow the company to consolidate its aviation businesses under AirAsia Group. With synergies between short-haul and long-haul operations, Fernandes expects better performance and a brighter future for both businesses.
Focus on Technology-Driven Services
Capital A’s new focus on digital and tech-driven services plays a key role in its future plans. “Capital A’s broader strategy is aimed at developing technology-driven aviation services and digital businesses that will support the significant anticipated growth in travel demand,” Fernandes stated.
Through CAPAS, the company will continue to expand its aviation services, including maintenance, repair, and overhaul (MRO) solutions via Asia Digital Engineering (ADE), and in-flight services through Santan. Other pillars include MOVE Digital, which focuses on travel and financial innovation through AirAsia MOVE and BigPay, and Teleport, which strengthens the logistics arm across ASEAN. Lastly, Brand AA manages the AirAsia brand globally.
Exiting PN17 Status
The approval will also help Capital A achieve a clean balance sheet, as they plan to exit Practice Note 17 (PN17) status. Fernandes noted that with a clear financial standing, Capital A can complete its regularization plan and return to a stable footing.
Capital A will soon distribute consideration shares to shareholders and seek court approval for a planned reduction and repayment of its issued share capital. This follows additional approval from Redeemable Convertible Unsecured Islamic Debt Securities (RCUIDS) holders in a meeting on October 14, 2024.
Capital A’s move to separate its aviation business sets the stage for a stronger, tech-powered future. The company plans to focus on its high-growth digital and aviation support services, while consolidating operations with AirAsia X.
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