With the aviation industry facing the brunt of the Covid-19 pandemic, low-cost carrier AirAsia X Bhd has informed about facing a cash crunch and looking to raise money. According to news agency Reuters, deputy chairman Lim Kian Onn said the airline has run out of money and needs to raise up to 500 million ringgit ($120.60 million) to restart the airline. Also Read: NEET 2020: Delhi’s Aakanksha Singh Scores 720/720, Ranked 2nd Due To Younger Age; Should NTA Overhaul Its Rules?
The Malaysian airline, the long-haul arm of AirAsia Group Bhd is aiming to restructure 63.5 billion ringgit ($15.32 billion) of debt and slash its share capital by 90% to continue operations.
As per the deputy chairman, the airline is in bad shape with actual liabilities of 2 billion ringgit, with the larger figure of 63.5 billion ringgit including all lease payments for the next eight to 10 years and its large order for Airbus SE planes and contracted engine maintenance with Rolls-Royce Holdings PLC .
On the other hand, AirAsia X also has to convince its lessors of its business plan because recently took one of the lessors took back a plane to convert it to a freighter.
The airline plans to liquidate its small Indonesia-based carrier and has completely written down its stake in Thai AirAsia X in its books, with the Thai carrier not part of the restructuring scheme.
AirAsia Group Bhd. has stopped funding its Indian affiliate as the global travel slump leaves the Malaysian group struggling to support a sprawling empire of no-frills airlines, people familiar with the matter said.
Back to India operations, AirAsia India Ltd.’s future may now depend on Indian conglomerate Tata Group. The group is the majority shareholder, and has provided emergency funding but yet to offer a complete rescue to the ailing airline, as per the report in the Print. Aviation minister, however, mentioned AirAsia shutting up shop in the South Asian nation, but his office later clarified that the comment was taken out of context.