Malaysian airline operator Capital A, also the parent of AirAsia, announced deals worth 6.8 billion ringgit ($1.42 billion) on Thursday, in a move to create a new listed entity and streamline operations by merging various airline affiliates.

As part of the deals, long-haul airline AirAsia X will take over Capital A's aviation business and eventually create a new company thereby taking over the listing status of AirAsia X.

Capital A's aviation business comprises airlines AirAsia Bhd and AirAsia Aviation Group.

The deal will allow Capital A to get rid of the significant liabilities associated with the airline units that it is selling.

The consolidated new aviation firm will be named AirAsia Group, Capital A said in a statement.

"The new aviation group will operate and provide a full spectrum of short, medium and long-haul low-cost air transportation services, with domestic flights and international flights from Malaysia, Thailand, the Philippines, Indonesia and Cambodia to numerous destination countries," AirAsia X said.

The new entity also plans to conduct a private placement in a bid to raise 1 billion ringgit — the proceeds from which will be used to manage debt and fund new planes and machinery.

For AirAsia Bhd's acquisition, AirAsia Group will not need to pay any purchase price as Capital A will transfer the debt it owes to AirAsia Bhd.

Capital A expects to record a pro-forma gain of 10.76 billion ringgit from the disposals, it said.

The deal will allow the airline operator to finally emerge as a holding company for all of its non-aviation firms.

Tony Fernandes, who has served as the chief of the group, said on Wednesday he has agreed to put aside retirement plans and signed a new five-year contract to continue as CEO.

($1 = 4.7740 ringgit)

(Reporting by Rishav Chatterjee in Bengaluru; Editing by Shilpi Majumdar)