AirAsia Group’s chief executive has admitted the budget airline has a liquidity problem caused by high fuel costs, but said the company is not closing down and new aircraft deliveries will go ahead as planned.
AirAsia Group CEO Bo Lingam told Nikkei Asia in an interview near Kuala Lumpur International Airport that operations continue as normal.
The airline lost RM527 million (about 4.32 billion baht) in the April to June quarter, its biggest quarterly loss in four years, as fuel costs rose 58%. As of June 30, its liabilities were about RM600 million higher than its assets, and it held RM954 million in cash, one of the lowest levels among airlines tracked by Bloomberg.
Lingam said the airline still has cash after paying lease fees because the business generates cash every day. He also ruled out a government rescue after rumours pushed the share price sharply lower in September.
He said funding is in place for about 70 to 75 aircraft, with seven new planes due in 2027 and 20 in 2028.
AirAsia is also raising US$1 billion (about 33.5 billion baht). Group Deputy CEO Farouk Kamal said US$500 million to US$550 million will consolidate existing debt into one loan, repaid in a single payment at maturity. This should ease short-term cash pressure, and the rest will partly go towards working capital.
Separately, Bloomberg reported on September 18 that AirAsia sold six of the 10 A321neo jets it received since early last year to leasing company BBAM, before they went to Vietnamese start-up Sun PhuQuoc Airways.
Lingam said the six were leased planes accepted during the Covid-19 restructuring, with rent too high to make flying them worthwhile. He said they were returned to lessors and it was a one-off decision.
Co-founder Tony Fernandes told a press conference in Bangkok that AirAsia has 500 aircraft on order and will not convert them to cash.
At the end of June, 161 of AirAsia’s 239 Airbus aircraft were in use.
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