Tony Fernandes Announces AirAsia X Debt Restructuring USD 7.9 Billion

 

 

AirAsia X, the long-haul subsidiary of Malaysian conglomerate Tony Fernandes and Capital A Kamarudin Meranun has finally completed its debt restructuring. They have paved the way for the airline to reverse 33 billion ringgit ($7.9 billion) in provisions previously set aside for the liability.

 

“This is another significant step in rebuilding AirAsia X after the pandemic,” said AirAsia X CEO Benjamin Ismail in a statement. “We returned to the sky in a strong position.”

 

Quoting Forbes in Jakarta, Monday (21/3/22) based on the restructuring plan approved by creditors and suppliers in November, AirAsia X will only pay 0.5% of its more than USD8 billion debt (Rp114 trillion) and terminate the supply contract.

 

As part of the deal, Airbus agreed to reduce aircraft orders to 15 wide-body A330neo (down from 78) and 20 narrow-body A321XLR (from 30).

 

As is well known, airlines are among the hardest hit by the Covid-19 pandemic as countries around the world close their borders to contain the coronavirus.

 

AirAsia X is one of several affiliates of Malaysian budget airline AirAsia Group—which was renamed Capital A in January—as part of its axis into digital businesses including fintech, ride-hailing, and food and package delivery.

 

They posted a record net loss of 34 billion ringgit in the financial year ending 30 June 2021.

 

AirAsiaX is one of the few Asian airlines to quickly implement a financial restructuring in the last year to reposition the post-pandemic recovery.

 

Billionaire Lucio Tan’s Philippine Airlines exited bankruptcy proceedings in late December and ramped up domestic and international flights. Singapore Airlines, which raised $15.9 billion in new capital during the pandemic, returned to the black in the third quarter ending December, buoyed by strong cargo demand.

 

“Cargo has been a strong savior for AirAsia X and our recovery is already underway as a combination airline with equal emphasis on cargo and passenger revenue,” said Ismail.

 

“We look forward to offering more value for money services across our core network together with cargo and consumer demand. In the next two months, we will restart passenger services to several other international destinations in line with the reopening of borders,” he added.

 

Fernandes and Kamarudin took over AirAsia in 2001 to build a low-cost carrier that would make air travel affordable. They have dropped out of last year’s ranking of Malaysia’s 50 Richest People list.

 

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