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Covid-19: AirAsia looks for govt. loan; many other airlines in crisis mode

It's a loan AirAsia is looking for, not a bailout.

TheMole
Written by TheMole

KUALA LUMPUR — April 3, 2020: After what could be seen as something that simply could not be avoided under the present circumstances, AirAsia has decided that it too needs to go to the government for a loan to tide it over and ease its cashflow due to the havoc caused by the pandemic.

Such a move though is not peculiar to the world’s best low-cost carrier, with airlines elsewhere, including full fare carriers, asking for help from their respective governments as every sector of the economy the world over finds itself on its knees as a result of this unseen virus that has now infected just over a million people globally.

AirAsia co-founder and Group CEO Tan Sri Fernandes, however, told Bloomberg TV in a phone interview yesterday that the company had enough reserves to see it to the end of the year and should bounce back after it gets to return to business.

Fernandes was quoted thus: “No bailout…. we don’t need a bailout. Obviously many airlines are looking for a loan.

“We think the cashflow will last us for the most part of the year.”

Simultaneously the group’s regional subsidiaries will seek the same from the respective governments where they are based.

AirAsia was reported to have reserves of RM2.2 billion at the end of last year.

In London, British Airways announced yesterday that it was suspending 30,000 jobs at least until the end of May but the furloughed staff will be paid 80 per cent of their basic salary subject to a maximum of 2,500 pounds a month under a government assistance package for workers announced several days ago.

The airline has about 45,000 employees.

Its 4,000 pilots have also agreed to go on four weeks of unpaid leave between this month and the next while flights at Gatwick and London City airports have all been cancelled.

In Singapore, the republic’s carrier Singapore Airlines has decided to cut down 96 per cent of its capacity while still looking at cost-cutting measures that are expected to affect 10,000 staff.

Elsewhere earlier, it was announced that airlines in Taiwan will be offered subsidies and loans totalling close to US$1.6 billion. Scandinavian carrier SAS will get loan guarantees of US$300 million from Sweden and Denmark while American Airlines recently drew down a credit line of $1 billion to join Delta and Northwest to shore up cash positions.

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TheMole

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