AirAsia
Capital A Berhad, operating as AirAsia, is a Malaysian multinational low-cost airline headquartered near Kuala Lumpur, Malaysia. Established in 1993 and commencing operations in 1996, the airline is the largest in Malaysia by fleet size and destinations. It operates scheduled domestic and international flights to over 166 destinations across 25 countries. Its primary hub is Kuala Lumpur International Airport, where it operates from Terminal 2, the low-cost carrier terminal.
AirAsia has a network of affiliate airlines catering to regional markets, including Thai AirAsia, Indonesia AirAsia, Philippines AirAsia and AirAsia Cambodia, which have bases in cities including Bangkok, Jakarta, Manila and Phnom Penh. AirAsia X, the airline’s long-haul subsidiary, primarily serves long-distance routes. In addition to passenger services, AirAsia manages Teleport, its dedicated freight division. Together, these carriers form an extensive network connecting Southeast Asia with other parts of Asia, Australia, Africa and the Middle East.
History
1993–2001: Foundation and early years
AirAsia was established on 20 December 1993, by DRB-HICOM, a Malaysian government-owned conglomerate, as a full-service carrier. The airline commenced operations on 18 November 1996, with its inaugural flight from Kuala Lumpur to Langkawi, utilising a Boeing 737-300. In its early years, AirAsia faced challenges such as high operating costs and competition from established carriers like Malaysia Airlines.File:Boeing 737-3Y0, AirAsia AN0592352.jpg|thumb|A Boeing 737-300 in AirAsia's original livery at Sultan Abdul Aziz Shah Airport, which served as a previous hub, during the airline's period as a government-owned full-service carrier
By the late 1990s, AirAsia had accumulated substantial debts, amounting to approximately MYR 40million. Efforts to stabilise the airline included route expansion, leasing aircraft for Hajj charters and internal discussions about potential management changes.
However, these initiatives were insufficient to address the airline's structural issues. The situation deteriorated further following the global aviation downturn after the September 11 attacks. By September 2001, AirAsia’s debt had risen to around US$11million, leaving the company on the brink of collapse.
2001–2002: Transformation into a low-cost carrier
On 5 September 2001, Tony Fernandes and Kamarudin Meranun acquired AirAsia through their company Tune Air Sdn Bhd for a nominal sum of one ringgit, taking on its considerable liabilities. Fernandes, a former executive at Time Warner, saw an opportunity to transform AirAsia into a low-cost carrier, inspired by the success of airlines such as Southwest Airlines and Ryanair. This acquisition marked a turning point in AirAsia’s history, setting the stage for its reinvention as a budget airline.After the acquisition, Fernandes and his team rebranded the airline as a low-cost carrier on 15 January 2002 by adopting a no-frills service model, enabling AirAsia to offer fares that were significantly lower than those of its competitors, particularly Malaysia Airlines. Promotional fares started as low as MYR 10, which attracted a large number of passengers.
In its first year under the low-cost model, AirAsia achieved profitability, marking a significant recovery from its previous financial challenges. The airline focused on point-to-point routes and utilised secondary airports, which helped lower operational costs and improve overall efficiency.
2003–2006: Expansion into new markets
Between 2003 and 2006, AirAsia embarked on a rapid expansion of its routes and infrastructure. In December 2003, the airline established a second hub at Senai International Airport in Johor Bahru, expanding its operational reach. AirAsia also began international operations with flights to Phuket in December 2003, to Bangkok in February 2004, and to Manila and Xiamen by April 2005.In 2002, the airline became the first in Asia to introduce ticketless travel via online bookings. The airline also launched SMS booking services, allowing customers to book flights directly from their mobile phones. In 2003, Thai AirAsia was founded, and in 2005, Indonesia AirAsia was launched. These affiliates allowed the airline to enter new markets, strengthening its regional presence across Southeast Asia.
By the end of 2006, AirAsia’s fleet had seen substantial growth, consisting of 35 Boeing 737-300s and eight Airbus A320s. Additionally, the airline placed orders for 100 more Airbus A320 aircraft, which helped increase its capacity and frequency of flights, supporting its expanding network.
2006–2012: Further expansion
In late 2006, AirAsia's CEO Tony Fernandes introduced a five-year plan designed to strengthen the airline's presence across Asia. The strategy focused on enhancing connectivity between existing destinations and expanding into new markets such as Vietnam, Indonesia, Southern China and India. As part of this effort, Kota Kinabalu became a hub on 7 July 2006, followed by Kuching on 20 July 2006. These initiatives led to a significant increase in passenger traffic, with AirAsia carrying about 13.9million passengers in 2007, compared to 5.7million in 2006.AirAsia expanded its offerings further in 2009 by launching Redbox, the world’s first low-cost courier service. The same year, the airline began flights from Penang to Hong Kong, adding Penang as another hub in its network.
In 2011, AirAsia entered into a controversial share swap agreement with Malaysia Airlines, aiming to reduce competition between the two carriers. However, due to regulatory concerns, this partnership was dissolved in early 2012.
2013–2019: Strategic developments and challenges
Between 2013 and 2019, AirAsia continued its expansion strategy, both by launching new routes and growing its affiliate network. Notably, the airline established Philippines AirAsia and AirAsia Japan in 2012, followed by AirAsia India in 2014. Despite its focus on growth, AirAsia’s efforts to establish airlines in countries such as China, Myanmar, Sri Lanka, Singapore, South Korea and Vietnam were hindered by various challenges and practical constraints.In 2014, AirAsia became the first Malaysian airline to offer onboard Wi-Fi services through its subsidiary, Tune Box. This innovation responded to the increasing demand for connectivity among travellers, reinforcing AirAsia's reputation as a leader in in-flight services.
By 2018, AirAsia introduced Teleport, a logistics venture under its digital division, to enhance its cargo and e-commerce capabilities. Teleport has since become a significant logistics provider, utilising AirAsia’s network to serve businesses and e-commerce platforms across Asia Pacific and beyond, including key hubs such as Hong Kong, Shanghai, Incheon, Narita, Bangalore and Sydney.
The airline was awarded the title of World's Best Low-Cost Airline by Skytrax for eleven consecutive years, from 2009 to 2019.
2020–2023: Navigating the pandemic and recovery
The COVID-19 pandemic had a significant impact on global aviation, including AirAsia. In March 2020, the airline suspended most of its flights due to travel restrictions, resulting in significant revenue losses. The airline grounded its fleet and implemented various cost-cutting measures, including layoffs and salary reductions for employees. AirAsia also focused on maintaining liquidity by securing loans and receiving government support.In late 2020, the airline launched the Airasia Super App, diversifying its business model beyond air travel to include services such as food delivery, e-commerce and logistics. This move was aimed at adapting to changing consumer behaviors and maintaining a steady revenue stream in the face of reduced air travel.
As vaccination rates increased and travel restrictions began to ease in 2021, AirAsia gradually resumed its operations. The airline restarted domestic flights within Malaysia in April 2021, focusing initially on rebuilding its domestic network before reintroducing international routes. By late 2022, AirAsia began reinstating international routes, prioritising key markets within ASEAN and beyond. The airline targeted popular destinations in Thailand, Indonesia and India to restore its pre-pandemic network.
On 3 January 2022, AirAsia proposed its corporate name change to Capital A, which subject to shareholders' approval. The proposed name has been approved by the Companies Commission of Malaysia and reserved by the company on 28 December 2021. On 28 January 2022, the company changed its corporate name from AirAsia Group Bhd to Capital A Bhd to reflect the expansion of its business portfolio beyond the core budget airline. However, its airline business continued to use the AirAsia brand.
AirAsia's recovery continued throughout 2022, as demand for travel rebounded. By the end of the year, the airline had carried approximately 9.95million passengers. In 2023, AirAsia significantly increased its capacity, with a nine-fold increase in available seats compared to the previous year. This expansion was driven by the resumption of routes and the addition of new aircraft to its fleet. Additionally, the airline expanded its international network by reintroducing routes between Thailand and China.
2024–present: Strategic reorganisation and global ambitions
On 8 January 2024, AirAsia X signed a non-binding agreement with Capital A to fully acquire AirAsia Bhd and AirAsia Aviation Group Limited, which oversees AirAsia’s affiliates outside Malaysia. The plan involves merging AirAsia Malaysia, Indonesia AirAsia, Philippines AirAsia and AirAsia Cambodia under the AirAsia X brand. Initially, the creation of a new entity, AirAsia Group Berhad, was proposed, but by August 2024, the decision was made to directly acquire AirAsia and AAAGL instead. This acquisition is projected to provide access to over 200 aircraft and 361 future aircraft orders from Capital A's aviation portfolio, integrating narrow-body and wide-body aircraft into a unified fleet.In March 2024, AirAsia launched its first flights to Perth in Australia using Airbus A321neo aircraft. By late 2024, AirAsia outlined plans to position Kuala Lumpur International Airport as a key global aviation hub. As part of this expansion strategy, the airline aimed to increase its fleet size from 79 to 92 aircraft by the end of 2024, while boosting daily flights from 230 to 258. Additionally, AirAsia plans to add eight new destinations to its network, bringing the total number of destinations to 106, up from 98.
File:AirAsia Airbus A321neo 9M-VAB Perth 2024.jpg|thumb|left|An AirAsia Airbus A321neo at Perth Airport, Western Australia
As of November 2024, to support its operational growth, AirAsia is considering acquiring up to 100 smaller regional aircraft. Discussions are underway with Airbus, Comac and Embraer, with potential options including the Airbus A220, Comac C919 and Embraer E2 families. These aircraft would complement AirAsia's existing Airbus A320 and A321 aircraft, enabling the airline to better serve secondary routes and adapt to market demands.
Capital A, AirAsia's parent company, took significant steps to address its financial challenges after being classified under Practice Note 17 by Bursa Malaysia, the Malaysian stock exchange, due to difficulties arising from the COVID-19 pandemic. PN17 requires companies facing financial distress to submit a recovery plan to remain publicly listed. In December 2024, Capital A submitted a regularisation plan that included reducing accumulated losses and transferring its aviation businesses to AirAsia X, with the aim of exiting PN17 by the first quarter of 2025 once all necessary approvals were obtained. The completion deadline was, however, extended several times, from the original January 25, 2025 date to March 25, May 31, July 31, August 31, September 30, and October 31, to allow additional time for securing the required approvals. On October 29, 2025, Capital A announced that all conditions for the share sale and purchase agreements had been fulfilled or waived, enabling the consolidation of all AirAsia-branded airlines under AirAsia X and marking a key step toward the company’s exit from PN17 status.
As part of its long-term growth strategy, AirAsia has outlined plans to expand its presence across additional ASEAN markets. This includes Vietnam, where the group is reportedly in discussions with local partners to establish a domestic operation despite several unsuccessful attempts over the past two decades. Preliminary discussions have also been reported regarding the establishment of local affiliates in Laos, Brunei and Myanmar, which would extend the group’s operational footprint across nearly all ASEAN countries.
Beyond Southeast Asia, AirAsia is pursuing expansion into the Middle East through the development of a new regional hub. In December 2025, Capital A signed a Letter of Intent with Bahrain’s Ministry of Transport and Telecommunications to explore the establishment of a hub in the country, which would connect Southeast Asia with Europe, Africa, and the Middle East, supporting both passenger and cargo operations. The airline is reportedly targeting up to 25 daily flights from Bahrain by 2030 and plans to apply for an operating licence to support the proposed expansion.
This initiative aligns with AirAsia’s July 2025 agreement with Airbus to acquire 50 Airbus A321XLR aircraft, with options to convert an additional 20 in the future. These extra-long-range narrowbody jets offer improved fuel efficiency and extended range compared to the A321neo, enabling the airline to operate low-cost services to Europe via one-stop connections through the Middle East, and to the United States with two-stop routes. By 2035, AirAsia aims to operate a fleet of more than 600 aircraft and carry between 155 and 175 million passengers annually, serving up to 175 destinations.