KUALA LUMPUR: AirAsia Group Bhd has clarified that its planned fundraising exercises, comprising up to US$1 billion (US$1=RM4.04) in international debt markets and RM700 million in local credit facilities, are primarily targeted at debt restructuring or refinancing and balance sheet consolidation, rather than purely funding operational shortfalls.
In a statement today, the group said this strategy aligns with previous public disclosures regarding capital structure optimisation.
"Demonstrating execution capability and market confidence, the group successfully raised US$300 million in March 2026, at the height of global market escalations and fuel volatility, to proactively extend debt tenures and reduce principal obligations,” it further said.
AirAsia explained that the primary objective of the funding strategy was to consolidate multiple existing facilities into a unified, lower-cost debt structure with extended maturities and better terms.
"This exercise will allow the group to refinance high-cost debt obligations incurred during the height of the COVID-19 pandemic, significantly lowering annual interest drag, optimising non-fuel unit costs and securing liquidity for strategic working capital,” it said.
AirAsia said it continues to execute a multi-layered risk management strategy framework to protect operating margins against macro energy volatility.
In the second quarter of 2026 (2Q 2026), the group recovered 70 per cent of fuel price increases through dynamic fare adjustments and reduced non-fuel operational expenses.
Complementing this, it said AirAsia is actively establishing a broader fuel hedging strategy across the wider group.
"Specifically for Thai AirAsia, the group has secured 13 per cent of its 3Q 2026 fuel consumption hedged at US$89 per barrel,” it said.
Recent media reports indicated that AirAsia is exploring a potential US$1 billion fundraising exercise in the international debt market, as the airline seeks to strengthen its liquidity position amid higher fuel prices and losses linked to the West Asia war.
AirAsia also clarified that its 20 to 25 per cent capacity adjustment in 3Q 2026 was a deliberate operational strategy aligned with seasonal travel patterns.
"The third quarter historically represents the leanest period for regional air travel, and the group will dynamically scale capacity back toward peak and pre-war levels in 4Q 2026, aligning with the strongest travel window of the year,” it said.
AirAsia said it prioritises absolute route profitability over raw aircraft utilisation to ensure every deployed asset delivers optimal financial returns.
Complementing network changes, it said the strategic return of 25 older, less fuel-efficient aircraft during the period was negotiated on favourable commercial terms.
The airline, which had 161 operating aircraft at the end of June, plans to return 25 older and less fuel-efficient aircraft to lessors during the current financial year.
"This rightsizing eliminates fixed lease burdens and reduces non-fuel unit costs ahead of new aircraft deliveries scheduled for 2028 and beyond,” it said.
Deputy group chief executive officer Farouk Kamal said AirAsia chose to trim excess capacity, return older aircraft on favourable terms, and lower its overall lease obligations rather than burn cash in a seasonally slower quarter. - Bernama
