AirAsia seeks to raise emergency cash, reviews Japan operations
Malaysia-headquartered low-cost airline AirAsia Group, with its revenue battered by the slump in air travel demand during the Covid-19 crisis, is seeking to raise as much as 2.5 billion ringgit ($601 million) by the end of the year to retain its liquidity and continue basic operations.
According to a Reuters interview with AirAsia Group CEO Tony Fernandes, the airline could raise up to 1.5 billion ringgit ($361 million) in bank loans and another one billion ringgit ($241 million) from investors, which would include private equity players, strategic partners and company conglomerates, both local and foreign. However, this would require an overhaul of its operative structure, particularly loss-making foreign franchises.
Fernandes said that AirAsia was particularly reviewing its presence in Japan, the smallest of its foreign operations, while the joint venture with Tata Sons in India would remain untouched for the time being, but was also under scrutiny regarding its financial performance.
India franchise also under scrutiny
He indicated that AirAsia Japan, a joint venture between AirAsia Group and Japanese investors, including e-commerce conglomerate Rakuten, was losing too much money to continue profitable operations and that “decisions on Japan” would be made “very soon.”
Fernandes said AirAsia Group intended to consolidate and strengthen its foothold in Southeast Asia, “and if that means one day exiting India and Japan, then so be it.”
With regards to the the airline group’s other businesses, industry observers say that their Malaysian and Thai businesses are likely to survive the pandemic “relatively unscathed,” but there will be challenges for the smaller franchises in Indonesia and the Philippines as well.
The pending aircraft orders of its long-haul arm AirAsia X are currently under discussion with manufacturer Airbus, Fernandes said.
AirAsia Group CEO Tony Fernandes Malaysia-headquartered low-cost airline AirAsia Group, with its revenue battered by the slump in air travel demand during the Covid-19 crisis, is seeking to raise as much as 2.5 billion ringgit ($601 million) by the end of the year to retain its liquidity and continue basic operations. According to a Reuters interview with AirAsia Group CEO Tony Fernandes, the airline could raise up to 1.5 billion ringgit ($361 million) in bank loans and another one billion ringgit ($241 million) from investors, which would include private equity players, strategic partners and company conglomerates, both local and foreign....
Malaysia-headquartered low-cost airline AirAsia Group, with its revenue battered by the slump in air travel demand during the Covid-19 crisis, is seeking to raise as much as 2.5 billion ringgit ($601 million) by the end of the year to retain its liquidity and continue basic operations.
According to a Reuters interview with AirAsia Group CEO Tony Fernandes, the airline could raise up to 1.5 billion ringgit ($361 million) in bank loans and another one billion ringgit ($241 million) from investors, which would include private equity players, strategic partners and company conglomerates, both local and foreign. However, this would require an overhaul of its operative structure, particularly loss-making foreign franchises.
Fernandes said that AirAsia was particularly reviewing its presence in Japan, the smallest of its foreign operations, while the joint venture with Tata Sons in India would remain untouched for the time being, but was also under scrutiny regarding its financial performance.
India franchise also under scrutiny
He indicated that AirAsia Japan, a joint venture between AirAsia Group and Japanese investors, including e-commerce conglomerate Rakuten, was losing too much money to continue profitable operations and that “decisions on Japan” would be made “very soon.”
Fernandes said AirAsia Group intended to consolidate and strengthen its foothold in Southeast Asia, “and if that means one day exiting India and Japan, then so be it.”
With regards to the the airline group’s other businesses, industry observers say that their Malaysian and Thai businesses are likely to survive the pandemic “relatively unscathed,” but there will be challenges for the smaller franchises in Indonesia and the Philippines as well.
The pending aircraft orders of its long-haul arm AirAsia X are currently under discussion with manufacturer Airbus, Fernandes said.
