Bad news for AirAsia X customers as they cannot claim any refunds or credits from the airline as it undergoes a restructuring process after being hit hard by the pandemic, The Rakyat Post reported. According to the AirAsia X support site, the airline has submitted an application for a debt restructuring to the High Court of Kuala Lumpur and customers have been listed as scheme creditors as part of that process. Additionally, credit account applications, flight changes and Unlimited Pass holders are also affected.
Long-haul, low-cost carrier AirAsia X Bhd has run out of money and needs to raise up to 500 million ringgit ($120.60 million) to restart the airline, deputy chairman Lim Kian Onn said in a newspaper interview published on Saturday, Reuters reported. The Malaysian airline, the long-haul arm of AirAsia Group Bhd, said this month it wanted to restructure 63.5 billion ringgit ($15.32 billion) of debt and slash its share capital by 90% to continue as a going concern. “We have run out of money,” Lim told The Star newspaper.
AirAsia X Bhd (AAX), now at an existential crossroads, is in dire need of massive debt forgiveness from its creditors, or be prepared to shut its business down for good, AviationPros.com reported. The low-cost, medium-haul airline, which has grounded all its flights due to the Covid-19 outbreak, is asking creditors and suppliers to forgo over RM63bil in liability and instead accept a maximum RM200mil in payment. While the proposal may sound atrocious, analysts think many creditors would, in fact, accept the offer.
AirAsia X has proposed to its creditors to restructure MYR63.5 billion ringgits (USD15.3 billion) of liabilities through a reconstitution into an acknowledgement of indebtedness for a principal amount of up to MYR200 million (USD48.2 million), ch-aviation reported. The Malaysian long-haul low-cost carrier proposed in a stock market filing that any outstanding amounts above the reconstituted value and all sums, such as interest, incurred after June 30, 2020, be waived.
Malaysia Airlines is struggling to make payments owed to creditors and lessors amid the coronavirus pandemic that has forced it to slash its operations, Reuters reported. The national airline, which restructured after two deadly crashes in 2014, has a new plan involving big discounts from creditors, but unlike last time the cash-strapped government is unwilling to bail it out. The airline has been loss-making for about a decade. Losses were aggravated by two tragedies in 2014 - the mysterious disappearance of flight MH370 and the shooting down of flight MH17 over eastern Ukraine.
Shares in AirAsia’s long-haul unit skidded after the Malaysian carrier launched a last-ditch plan to save the business, blaming “severe liquidity constraints” caused by the coronavirus pandemic, the Financial Times reported. AirAsia X’s Kuala Lumpur-traded stock fell 10 per cent on Wednesday a day after the company warned of “an imminent default of contractual commitments [that] will precipitate a potential liquidation of the airline”. The proposed restructuring comes as the future of AirAsia, owned by Malaysian tycoon Tony Fernandes, hangs in the balance.
The parent of Malaysia Airlines has warned leasing companies that state fund Khazanah will stop funding the group and force it into a winding down process if restructuring talks with lessors are unsuccessful, according to a letter seen by Reuters. The warning from Malaysia Aviation Group (MAG), the holding company for the state carrier, raises the stakes in negotiations for a financial shake-up known as “Plan A” and sets out an alternative plan to divert funds to a sister airline unit called Firefly, Reuters reported.
In a related story, Bloomberg News reported that AirAsia Group Bhd. will cease operations in Japan immediately as it tries to reduce cash burn amid the coronavirus outbreak that’s wiped out travel demand globally. AirAsia Japan has stopped operations as of Monday, Southeast Asia’s second-biggest budget carrier said in a statement. That will help the parent conserve cash. Further steps on the decision will be made in accordance with applicable laws and regulations including the Japan Civil Aeronautics Act, it said.
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, Bloomberg News reported. AirAsia India Ltd.’s future may now depend on Indian conglomerate Tata Group, its majority shareholder, which has provided emergency funding but has yet to commit to a full rescue, according to the people, who asked not to be named discussing a confidential matter. The airline isn’t at any immediate risk of folding, the people said.