KUALA LUMPUR (May 16): Airasia X Bhd (AAX) was among the top gainers in early trade on Tuesday (May 16), rising as much as nine sen or 5.73% to RM1.66 with some 7.11 million shares changing hands and a market capitalisation of RM688.59 million.

Year-to-date (YTD), AAX gained 175% compared to 60 sen per share on Jan 3, 2023.

Meanwhile, shares of AAX’s sister company Capital A Bhd rose 1.5 sen or 1.99% to 77 sen, with 6.34 million shares traded and a market capitalisation of RM3.19 billion.

YTD, Capital A — which operates short-haul, low-cost airline AirAsia — has grown 17.69% compared to its share price of 65 sen on Jan 3.

In the group’s quarterly financial report ended Dec 31, 2022, AAX reported stellar results with its net profit rising six-fold quarter-on-quarter to RM153.48 million from RM25.09 million on record average fare, higher load factor and a sharp increase in passengers carried.

It is expected that AAX’s performance and trade activity will improve due to the reopening of China on March 15, 2023, along with the airline’s announcement on the same day that it has launched three new routes to southern Chinese cities — Quanzhou, Guilin and Chengdu — being part of the network of 15 routes, with over 129 weekly flights between China and Malaysia.

“Our newest route to Tianfu serves as the foundation for more AirAsia X flights to China in the near future, which will significantly boost our North Asian network.

“As China is rapidly bouncing back, we expect to launch even more flights to and from the country, as well as to increase the frequency on the most popular and profitable routes within our network in the short to medium term,” said AAX Malaysia chief executive officer Benyamin Ismail.

Currently, both Capital A and AAX are in the midst of preparing their respective regularisation plans. Capital A's submission deadline is July 7, 2023 while AAX's submission deadline is July 28, 2023. On May 9, AAX had been granted an additional three-month extension to submit its regularisation plan.

The regularisation plan is crucial as it is supposed to lift not just AAX, but also Capital A out of Practice Note 17 (PN17) status. It is widely expected that the regularisation plan involves Capital A injecting its aviation business into AAX via an issuance of shares.

Capital A fell into PN17 status on Jan 14, 2022, while AAX did so on Oct 27, 2021, after accumulating pandemic-led losses, which resulted in negative shareholders equity for both companies.