AirAsia X targets major debt overhaul

Malaysia’s AirAsia X is targeting a debt restructuring of $500–$600 million after acquiring the short‑haul aviation business of Capital A and moving to consolidate the group’s seven airlines under a single AirAsia X banner, Deputy Group CEO Farouk Kamal said. The consolidation aims to simplify operations, cut costs and strengthen negotiation leverage with creditors while Capital A focuses on financial recovery.

Farouk said the carrier is pursuing refinancing initiatives to extend maturities, lower interest costs and combine multiple debt instruments into one or two loans. Talks with lenders and advisers are underway and any restructuring will be subject to creditor agreement and regulatory approvals. Management stressed that day‑to‑day operations should continue without disruption during the process.

AirAsia X plans to expand its long‑haul network as part of the strategy: flights to London are planned from midyear, building on its November launch to Istanbul, and the airline will develop a hub in Bahrain to enhance connectivity to Central Asia, the Middle East, Europe and Africa. The carrier expects delivery of four Airbus A321LRs this year to support expansion beyond Asia and previously ordered 50 A321XLRs, with options to convert 20 existing orders and explore additional regional type aircraft—potentially adding up to 150 jets in future plans.

The group, which has grown into one of Asia’s largest low‑cost operators since 2001, was hit hard by pandemic travel restrictions that left parent Capital A in a distressed classification on Malaysia’s stock exchange. AirAsia X’s consolidation is intended to improve aircraft utilization, route coordination and revenue generation while addressing lingering high debt levels, fuel and currency pressures.

Analysts view the move as part of a wider industry trend of airlines seeking permanent balance‑sheet fixes after emergency pandemic financing; successful execution could restore investor confidence and enable growth, but risks remain if creditor negotiations stall or market conditions deteriorate. AirAsia X said it remains committed to its low‑cost long‑haul model and will provide updates as restructuring talks and regulatory steps progress.