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AirAsia optimistic of getting RM1 billion loan from banks

AirAsia X's Airbus A330neo

TheMole
Written by TheMole

KUALA LUMPUR — July 9, 2020: AirAsia Group has received indications of support for funding of more than a billion ringgit from financial institutions.

In this regard, the company has been presented with proposals in various forms.

Group CEO Tan Sri Tony Fernandes said in a statement that a certain portion of the financial support would be eligible for the government-guaranteed loan under the Danajamin Prihatin Guarantee Scheme.

AirAsia Philippine and Indonesia are also in various stages of applications for loans. 

According to Fernandes, the group has embarked on a headcount rationalisation for leaner operations. Internal cost-cutting efforts include a group-wide temporary salary reduction of between 15 and 75 per cent.

“We have received deferrals from our supportive lessors and are now working on further extensions. We have also restructured 70 per cent of our fuel hedging contracts and are continuously negotiating with our supportive counter parties for the remaining exposure. 

“All in all, we expect at least a 50 per cent reduction in our cash expenses in 2020,” he said.

AirAsia has resumed domestic operations in Malaysia, Thailand, Indonesia, India and the Philippines on a staggered basis since May.

In Kuching, the state government has thanked the airline for increasing the frequency of flights between this city and Sibu from one to three times daily starting next month.

AirAsia, the only airline serving the route, had reduced frequency after the movement control order was imposed from March 18.

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