Flying High: Air Asia Merger Signals the Fightback of Low-Cost Air Travel

The merging of Air Asia and Air Asia X is being touted as the “the beginning of a new era” for low-cost air travel, at a time when consumers need it most.

At a lively press conference in Kuala Lumpur last week, including a couple of dance numbers by Air Asia staff, CEO of Capital A (Air Asia parent company) Tony Fernandes admitted that the past few years for airline companies had been the hardest he had seen, harder even than starting the low-cost Asian carrier over two decades ago.

But Tony was clear that after four years of not operating with a full fleet that the airline is “coming back stronger from Covid” and that all staff that were laid off during that time were now back on the payroll.

Air Asia announced a MYR6.8 billion deal ($2.18 billion) that will restructure is short-haul operations and its long-haul airline (Air Asia X) into one entity. The combined entity, known as Air Asia Group, will then use the new synergies to push low-cost travel further than ever before.

The group plans to combine its airline orderbook at a time when aircraft production is squeezed, streamline engineering and ground handling and pass these cost savings on to the consumer.

Going the extra mile

For consumers, the increased fleet and decreased bureaucracy means better-value fares and more scope for international travel at a time when cost-of-living pressures are impacting Australians’ natural wanderlust.

“We are excited about the dawning of a new era, where AirAsia and Air Asia X operations will unify to create a single-type fleet that can reach the entire world, without the complexities associated with a mixed fleet,” says Bo Lingham Group CEO Air Asia Aviation Group. “With extended 7- to 10-hour range capabilities and unparalleled fuel efficiency, these aircraft can fly further and more efficiently than previous narrowbodies, allowing us to explore new destinations and pioneering new and underserved routes, which has been the hallmark of AirAsia’s success. Our ambition is to rival global giants with a profitable, low-cost network spanning the globe.”

The group also announced it will acquire 362 new aircraft to help with the group’s expansion, one of the largest acquisitions in the world with the plan to become the world’s largest network carrier spanning the majority on continents including Africa. The Air Asia Airbus fleet will be able to service the entire globe with just one stop via its multi-hub strategy.

The news will be welcomed by Australian travellers, already burdened by higher international airfares, and it makes Kuala Lumpur a new hub for international travel.

Looking for more inspiration? Check out Spice Up Your Life: 23 of Thailand’s Best Restaurants.