Capital A to reportedly raise US$400m equity from AirAsia merger

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Capital A, parent of budget airline AirAsia, is reportedly looking to raise up to US$400 million in equity from a planned merger of its aviation business.

In an interview with Reuters, group chief executive officer Tony Fernandes said that that would be on top of a US$200 million bond-raising the company is hoping to conduct in the new few weeks.

Don't miss: These are some of AirAsia's Tony Fernandes' most talked-about moments over the years

In addition, Fernandes reportedly told Reuters in an interview that the acquisition by AirAsia X of Capital A aviation assets will be done by June and July.

He did not, however, provide details on what the financing would be used for.

The proposed deal was announced last month and will see the formation of a single airline, AirAsia group.

“All businesses across Capital A have been thriving and we are ready to grow. We need to raise funds for business expansion, but gaining access to capital has been challenging due to Capital A’s Practice Note 17 (PN17) status," said Fernandes.

"We have been engaging committed investors who have expressed a strong preference for a pure aviation play," he added.

To address this, and to ensure a robust financial injection, the company is strategically pursuing the sale of the aviation business to AirAsia X to create an aviation pure play, consolidating both long and short-haul airlines under the AirAsia brand, he explained.

This news comes after the brand debuted its "Free Seats campaign". The free seats campaign offers discounted seats to over 130 destinations worldwide, targeting millennials and Gen Zs.

Furthermore, AirAsia is providing discounted flights to various destinations across Asia and beyond such as Almaty, Singapore, Krabi, Cebu, Jakarta, and Boracay.

Seats booked during this campaign can be used for travel between 1 September 2024 and 18 June 2025.

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