AirAsia’s Thai subsidiaries, Thai AirAsia and Thai AirAsia X, will not be part of the group’s reorganization to form a unified airline group – at least not for now.
During a media conference held at the group’s HQ in Kuala Lumpur on January 8, 2023, AirAsia CEO Tony Fernandes announced that the group’s multiple airlines (which operate under the AirAsia brand but are each technically based in a different country) would be merging with AirAsia X, the firm’s long-haul arm, to form a single, unified airline.
However, after Fernandes traveled to Bangkok to meet Thailand’s prime minister, it was reported the next day that AirAsia’s two Thailand-based subsidiaries would remain outside of the operation for a period of two to three years.
The reason given for this differentiated treatment is the need for AirAsia X to complete its own business restructuring, which is expected to happen no sooner than late 2025.
Like the rest of the AirAsia group, the group’s Thai subsidiaries suffered greatly because of the COVID-19 pandemic and was put into receivership. In September 2023, Thailand’s Central Bankruptcy Court approved the airlines’ financial rehabilitation plan, which paves the way for an orderly recovery from this episode of financial distress.
The financial rehabilitation plan contemplates a return to fleet and revenue expansion, with the addition of another 11 aircraft within the next two years, as well as a reduction in operating costs through the renegotiation of leasing and maintenance agreements and the implementation of a debt repayment plan.
When it comes to the AirAsia group as a whole, Fernandes highlighted the positive growth outlook and the expectation to triple the group’s combined fleet by 2028.
In this context, AirAsia’s Thai subsidiaries are expected to play a prominent role in this renewed growth and will receive around a quarter of the new aircraft being delivered to AirAsia by Airbus. Moreover, Bangkok has been designated as one of the group’s four hubs upon which AirAsia wants to cement its future international expansion.