PETALING JAYA: AirAsia Group Bhd may have enough cash to last them for most of 2020 but it is currently seeking out a loan from the Malaysian government to cushion the impact from the challenging economic environment.
The low cost carrier’s chief executive officer Tan Sri Tony Fernandes(pic) said there was no need for bailouts and what most airlines were looking for were loans.
“We think the cash will last us for the most part of this year and when the sales return, then we’re okay.
“It’ll be great to get a loan as well and we’re working on that with our government. We think liquidity is available in Malaysia and Thailand, ” he told Bloomberg Markets in an interview.
And amidst the tough environment that airlines are operating in, Fernandes remained optimistic, adding that AirAsia was lucky to have restructured its business a lot and moved towards the digital end.
He also said the airline’s cost structure is robust enough and the group is restructuring further.
He admitted that the coronavirus disease (Covid-19) pandemic was currently the worst crisis he has ever been through.
“We have a lot of ideas to get going again.
“It’s going to be an uphill slog but we remain optimistic. It’s always better to have more cash.
“We have enough at the moment but we’ll be very happy to raise some.
“And it’s about getting our planes flying again, that’s the most important thing right now.
“Growth will come later, ” he said.
Fernandes also said that AirAsia had made its representations to the government and he was sure that something would come out.
“Tourism is 15.8% of the gross domestic product (GDP) and AirAsia itself is 1.8% of that GDP.
“So we’re sure our suggestions will be listened to, ” he said.
On its non-airline businesses such as e-wallet, F&B and cargo, Fernandes said the businesses were doing very well and the beauty was, they did not burn a lot of cash on that side.
He added that they were far from others but the challenging environment currently might give them the chance to catch up.
Asked about the talks of a merger between AirAsia and Malaysia Airlines, Fernandes said he was not aware of it as AirAsia was just focussed on getting themselves in order as he had never looked at mergers and acquisitions as a solution.
“But at this point, we’ll keep all options open, but it’s not being discussed at the moment.
“I think it will be very silly of me and the board to close all options, ” he said.
On the long haul carrier AirAsia X Bhd, Fernandes said it was doing very well over the last fourth quarter and the beginning of January prior to Covid-19.
He said it was rationalising its fleet and most of AirAsia X’s flights have become medium haul.
“We’re changing the fleet, we’re bring down routes to shorter distances and we think we’ll be beneficiaries in some ways because people want to save some money.
“When we return, a low cost product would be more viable and we think in the immediate future, travel will be very regional and won’t be cross continental so we think we’re in a good spot, both AirAsia and AirAsia X, ” he said. Asked if there were any considerations for AirAsia to switch from Airbus’ A330 to Boeing’s 787, Fernandes replied no, stressing that AirAsia has an “interesting relationship” with Airbus and it has a large order book with them.
“Whether its Boeing or Airbus, I can’t see anyone taking new planes at least for a while. I don’t think any airline is looking at growth right now.
“The airline industry has to recover, numbers have to come down and business models will have to change. The world is changing but we’re prepared. You can put your head in the sand and cry or you can get up there and do something, ” Fernandes said.
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