AIRASIA Group has successfully repaid more than half of the RM300 million loan it obtained from Sabah Development Bank during the height of the pandemic when the airline was struggling to stay afloat.
AirAsia CEO Tan Sri Tony Fernandes stated that the loan not only enabled the firm to survive during the Covid-19 crisis and sustain thousands of staff, but also mutually benefited the company and Sabah.
“To be quite honest, that loan saved us. We’ve already paid down the loan to RM170 million, and we will repay the rest over the next two years. We’ve also paid RM69 million in interest to the Sabah Development Bank. It saved AirAsia, preserved jobs, and kept tourism going in Sabah,” he told reporters in Kota Kinabalu today.
Fernandes, who was in town for several meetings, made these remarks after receiving the Sabah Tourism Appreciation Award from the Sabah Tourism Board.
Sabah Development Bank has come under a lot of heat in Sabah recently due to excessive evergreening of loans.
State Finance Minister Datuk Seri Masidi Manjun recently alleged the bank was concealing losses for years through fictitious loans to cover non-performing assets, which have now accumulated to over RM5 billion.
AirAsia secured the RM300 million loan in November 2020 to navigate the severe financial challenges caused by the global Covid-19 pandemic.
Fernandes explained that the funds were allocated across various parts of the business, including the development of a cold storage facility, AirAsia Move, Teleport, and the airline itself.
“Teleport is doing a great job for farmers. Many farmers spend a lot of money moving their products. We want to build cold storage to help fishermen and farmers send their goods directly to China, Japan, and other markets,” said Fernandes, referring to AirAsia’s logistics arm.
He also highlighted the progress of AirAsia Move’s e-hailing subsidiary, AirAsia Ride, which has already achieved over 14,000 rides per month.
Fernandes further revealed plans to continue investing in Sabah, including establishing a maintenance, repair, and overhaul facility in the state.
“We have a 14-bay hangar in Johor Baru, but we need more. We need another 28 bays. We think this is a great opportunity for Sabah, and I’ll be discussing that with the Sabah finance minister later,” he said, claiming he saw Sabah’s potential to be an aviation hub.
Currently, AirAsia transports around 80 million passengers to and from Sabah annually while employing over 20,000 staff, with over a thousand of them in Sabah.
Also present were Assistant Tourism, Culture and Environment Minister Datuk Joniston Bangkuai and Sabah Tourism Board boss Julinus Jimit. – August 13, 2024
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