KUALA LUMPUR – AirAsia X Bhd has come up with a restructuring plan that will enable it to be fully operational again in the midst of international travel restrictions caused by the Covid-19 pandemic.
Chief executive officer Benyamin Ismail said AirAsia X and other airlines were struggling to survive during the pandemic.
“It has been difficult for the airline during this period as we had to ground all scheduled flights, implement salary cuts and retrenchments for the first time in the company’s history as a consequence of the pandemic.
“However, we remain committed to our guests, Allstars, business partners and shareholders to ensure we build a viable and sustainable airline for the long-haul. For the survival of this airline, the proposed restructuring plan is our only option,” he said in a statement today.
Similar exercises were likely to continue during the restructuring process, but the focus was to keep as many jobs as possible.
“We have a low-cost base, we are in the right part of the market and many of our key markets are in green zones which are likely to reopen first.
“We have a robust recovery strategy in place, and with the continued support from our stakeholders, we will overcome all challenges and come out stronger,” Benyamin added.
The long-haul budget airline, a sister company of AirAsia Group Bhd, said the restructuring would include the appointment of Datuk Lim Kian Onn as deputy chairman to lead the restructuring initiative and to facilitate a fresh equity injection.
Lim, a chartered accountant, was an investment banker before he became an AirAsia X board member in 2012.
AirAsia X, which incurred a net loss of RM650.32 million for the financial year ended Dec 31, 2019, posted an unaudited loss of RM854.94 million in the first half of this year.
The airline said it was facing severe liquidity constraints and an imminent default of contractual commitments would precipitate a potential liquidation of the airline.
“A major debt restructuring and renegotiation of its financial obligations are pre-requisites for any raising of fresh equity required to restart the airline,” it said.
The proposed restructuring plan which, if approved, would secure the airline’s aviation survival, AirAsia X added.
“The proposed restructuring plan and establishment of new contracts, agreements and/or arrangements are aimed to right-size the group’s level of operations and financial obligations, which is crucial to the group’s continued existence in the aviation landscape,” it said.
The company added that it had had extensive discussions with all major creditors in the last two months, and all of them had expressed strong support for a continuation of the airline business. – Bernama, October 6, 2020
