There’s no end to troubles for AirAsia Group. With Tony Fernandes finally back in the CEO saddle after being cleared of bribery charges, the airline now has to fight a much tougher pandemic battle.
Malaysia’s flagship budget airline AirAsia Group is seeking a government loan as the industry suffers amid the coronavirus outbreak, Bloomberg Markets reported on Thursday, citing the airline’s group chief executive.
The aviation tycoon Tony Fernandes said the airline was in discussion with the government for a loan to support its current cash position to ride out the challenging operating environment.
Many countries have imposed travel restrictions to curb the virus spread and Malaysia is under a lockdown until April 14.
Fernandes said the airline had enough cash reserves and did not need a bailout.
“We think the cash can last us for the most part of this year and if sales return, then we’re okay. But it’d be great to get a loan as well and we’re working on that with the government,” he said.
AirAsia had a net cash position of 2.2 billion ringgit ($505 million) as of end-2019. The airline hopes to reopen sales in the middle of this month.
Fernandes denied any ongoing merger talks, but did not rule it out. Local media have reported in recent weeks that a merger between AirAsia and national carrier Malaysia Airlines could be on the cards.
Local newspaper the New Straits Times also reported this week that local airlines could get up to 10 billion ringgit in financial assistance from sovereign wealth fund Khazanah Nasional.
Citing sources, the daily said the potential assistance, meant as a short-term relief for operating cost and improve liquidity, would come in the form of loans guaranteed by Khazanah.
($1 = 4.3520 ringgit)
(Reporting by Liz Lee; Editing by Alex Richardson)
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Photo Credit: AirAsia Airbus A320-200 planes are seen on the tarmac of Kuala Lumpur International Airport 2 (KLIA2) in Sepang, Malaysia, February 4, 2020. Reuters / Lim Huey Teng