AirAsia’s future “in doubt” – stock tumbles


The share price of AirAsia Group dropped almost 18 per cent on July 8 after the budget carrier’s auditor Ernst & Young (EY) in a statement to the Kuala Lumpur stock exchange said that the future of Asia’s biggest discount airline was in “significant doubt,” highlighting AirAsia’s huge debts. Trade in the stock was halted in the morning.

EY said it has found “material uncertainties” that may cast “significant doubt” on the carrier’s ability to continue now that the coronavirus has forced many countries to close their borders and restrict travel.

EY said AirAsia’s current liabilities already exceeded its current assets by $430 million at the end of 2019, before the start of the pandemic. The carrier’s financial performance and cash flow have been further hit by the grounding of its planes amid tight travel curbs and lockdowns.

AirAsia posted its first quarterly loss on July 6. The Covid-19 crisis has closed the borders of most of the airline’s key markets, including Malaysia, Thailand, Indonesia, the Phillippines, China and India. As a result, the budget airline carried just 9.85 million passengers in the first quarter, 22 per cent of the year-earlier total.

AirAsia admits “financial distress”

AirAsia said in a stock exchange filing on July 7 that criteria had been triggered for it to be categorised as a financially distressed company, which would mean it had to produce a business improvement plan. However, it said it would avoid that designation for now under a 14-month relief period extended by the Malaysian bourse to companies hit by the virus crisis.

AirAsia’s group CEO Tony Fernandes said that the carrier was in talks for joint-ventures and collaborations that may result in additional investment, and it has also applied for bank loans and is weighing proposals to raise capital.

In June, South Korean conglomerate SK Group said it was reviewing a proposal to buy a small stake in the airline. In May, AirAsia reportedly sent a memo to Malaysian banks seeking to borrow around $230 million.

The share price of AirAsia Group dropped almost 18 per cent on July 8 after the budget carrier’s auditor Ernst & Young (EY) in a statement to the Kuala Lumpur stock exchange said that the future of Asia's biggest discount airline was in “significant doubt,” highlighting AirAsia’s huge debts. Trade in the stock was halted in the morning. EY said it has found “material uncertainties” that may cast “significant doubt” on the carrier's ability to continue now that the coronavirus has forced many countries to close their borders and restrict travel. EY said AirAsia’s current liabilities already exceeded its current...


The share price of AirAsia Group dropped almost 18 per cent on July 8 after the budget carrier’s auditor Ernst & Young (EY) in a statement to the Kuala Lumpur stock exchange said that the future of Asia’s biggest discount airline was in “significant doubt,” highlighting AirAsia’s huge debts. Trade in the stock was halted in the morning.

EY said it has found “material uncertainties” that may cast “significant doubt” on the carrier’s ability to continue now that the coronavirus has forced many countries to close their borders and restrict travel.

EY said AirAsia’s current liabilities already exceeded its current assets by $430 million at the end of 2019, before the start of the pandemic. The carrier’s financial performance and cash flow have been further hit by the grounding of its planes amid tight travel curbs and lockdowns.

AirAsia posted its first quarterly loss on July 6. The Covid-19 crisis has closed the borders of most of the airline’s key markets, including Malaysia, Thailand, Indonesia, the Phillippines, China and India. As a result, the budget airline carried just 9.85 million passengers in the first quarter, 22 per cent of the year-earlier total.

AirAsia admits “financial distress”

AirAsia said in a stock exchange filing on July 7 that criteria had been triggered for it to be categorised as a financially distressed company, which would mean it had to produce a business improvement plan. However, it said it would avoid that designation for now under a 14-month relief period extended by the Malaysian bourse to companies hit by the virus crisis.

AirAsia’s group CEO Tony Fernandes said that the carrier was in talks for joint-ventures and collaborations that may result in additional investment, and it has also applied for bank loans and is weighing proposals to raise capital.

In June, South Korean conglomerate SK Group said it was reviewing a proposal to buy a small stake in the airline. In May, AirAsia reportedly sent a memo to Malaysian banks seeking to borrow around $230 million.

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