AirAsia co-founder rejects bailout claims

Dhaka: AirAsia co-founder Tony Fernandes has rejected reports that the Malaysian low-cost carrier requires a government bailout, saying no such discussions have taken place and the airline remains financially sustainable.

Speaking during a media briefing in Bangkok on September 18, Fernandes disputed reports that Malaysia’s government had approached Malaysia Airlines and Batik Air about potentially taking over AirAsia’s domestic market share. He described the reports as inaccurate and “irresponsible.”

Fernandes also dismissed claims that AirAsia was seeking about US$3 billion in emergency funding. He said the airline had continued servicing its debt and had not received government assistance.

The comments came as AirAsia faces higher fuel costs and financial pressure. The carrier posted a second-quarter net loss of RM 831 million, while its liabilities stood at RM 18.4 billion as of June 30, according to Reuters.

The airline has responded by cutting weaker routes, returning 25 older aircraft to lessors and renegotiating supplier contracts. Fernandes said AirAsia expects to raise more than USD 1 billion, primarily to refinance existing debt, by December or January.

He also said reports concerning A321neo aircraft sales were linked to the oil supply situation rather than financial distress.