AirAsia ambitious to propel Kuala Lumpur as the world’s leading aviation megahub and Asean as the next Dubai

SEPANG, October 16, 2024 -- Photo Caption: [L-R] Mayur Patel, Head of Asia, OAG Aviation presenting the certification to Tan Sri Tony Fernandes, CEO of Capital A and Mr. Shahrunnizam Abd Jamil, General Manager Operations KLIA Terminal 2 Malaysia Airports (Sepang) Sdn Bhd

In a bold move to position Kuala Lumpur International Airport (KLIA) as the world’s premier aviation hub, AirAsia today reaffirmed its commitment to driving Asean connectivity and elevating the region’s status as a global transit point, much like Dubai. Following the overwhelming approval at Capital A Berhad’s Extraordinary General Meeting (EGM) of the proposed disposal of its aviation business to AirAsia X Berhad, this marks a monumental step forward in unlocking massive growth potential for the group.

At the EGM held on 14 October, 99.97% of Capital A shareholders voted in favour of the proposed disposal, paving the way for Capital A’s restructuring and exit from PN17 status. This approval enables Capital A to sharpen its focus on its four strategic pillars—Capital A Aviation Services (CAPAS), MOVE Digital, Teleport, and the Brand AA company (also known as AirAsia brand co.)—while unlocking synergies between short-haul and long-haul operations for greater growth and shareholder returns. The final approval being sought from AirAsia X shareholders on 16 October will further cement these plans, positioning both companies for stronger growth as they work toward a combined airline group by the end of the year.

YB Anthony Loke Siew Fook, Minister of Transport Malaysia commended both parties on the recognition: “I would like to extend my heartfelt congratulations to AirAsia and Malaysia Airports Holdings Berhad (MAHB) for their remarkable contributions in positioning Kuala Lumpur International Airport (KLIA) as a global aviation megahub. Being recognised as the second most connected airport in the world by OAG speaks volumes about the extensive connectivity AirAsia provides in the region, supported by the robust infrastructure of MAHB. The resilience, innovation, and collaboration between both parties have been instrumental in driving this success. The government is proud to witness KLIA’s transformation, which reinforces Malaysia’s status as a key player in global air travel

AirAsia’s ambitious expansion strategy aims to further solidify Kuala Lumpur as the world’s leading low-cost carrier megahub, positioning Malaysia as the prime centre for affordable travel in 2025. The airline plans to increase its operational fleet from 63 to 76 aircraft (+21%), supporting a growth in daily flights from 230 to 258 (+12%), and boosting its network by adding 8 new destinations, expanding from 98 to 106 destinations (+8%) in 2025. This reactivation will significantly enhance the airline’s ability to meet the rising travel demand across established and emerging markets in Asia, Africa, and the Middle East. By strengthening its presence across these regions, AirAsia is poised to meet growing market needs and expand its connectivity for both passengers and businesses.

In addition to its growth strategy, AirAsia plans to strengthen its presence in existing markets while exploring opportunities to open new secondary airports across key regions in Asia by 2025. The period from 2026 to 2027 will focus on expanding into strategic markets in the Pacific and East Asia, with further growth planned in select regions of Africa. By 2028, AirAsia aims to extend its reach in the Middle East, with future plans to explore opportunities in Europe and North America by 2030, ensuring a robust global network for the years ahead.

Tony Fernandes, CEO of Capital A and Advisor to AirAsia Aviation Group, stated: "The EGM results are a monumental step toward creating a powerful aviation group and transforming KLIA into the world’s leading aviation megahub. Our Allstars have shown resilience, innovation, and fierce determination through the challenges of the last five years. We’ve survived one of the most difficult periods in aviation history, and now we’re coming out stronger than ever.

“I would also like to express our gratitude to Malaysia Airports Holdings Berhad (MAHB) for their long-standing friendship and partnership, which has been instrumental in our journey to grow KLIA into a world-class aviation hub. With the consolidation of our aviation businesses and a stronger focus on aviation services, we are unlocking massive growth opportunities and ensuring that Asean becomes the next Dubai in global air travel."

Ranked as the second most connected airport in the world after London Heathrow by the 2024 OAG Megahubs Index, KLIA boasts over 14,500 possible low-cost connections across 137 destinations, largely powered by AirAsia’s expansive network. AirAsia and AirAsia X airlines operate 43% of all flights at KLIA and account for 74% of the airport’s total low-cost carrier (LCC) capacity, reinforcing Kuala Lumpur’s dominance over regional hubs such as Singapore and Bangkok.

Mayur Patel, Head of Asia at OAG Aviation said, "Congratulations to AirAsia for being a dominant carrier at KLIA and to MAHB for being recognised among the world’s top MegaHubs. The relationship between an airline and airports is symbiotic, and AirAsia’s strategic growth plan positions it well to support the airport’s role as a leading aviation hub, and elevate Asean as a global transit point."

As Capital A navigates its exit from PN17 status, this restructuring positions AirAsia Group to streamline its operations and focus on long-term growth in the aviation sector. The unified AirAsia Group, combining short-haul and long-haul synergies, will unlock greater efficiency and profitability, ensuring Kuala Lumpur and Asean stand at the forefront of global aviation.

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