AirAsia Group Bhd. tumbled to the lowest in almost four years after Malaysia’s leader said the country hasn’t agreed to provide financial support to the struggling airline.
"For now, the government has not entered into any agreement or commitment to provide financial support to AirAsia, whether in the form of guarantees, loans, or the injection of public funds,” Prime Minister Datuk Seri Anwar Ibrahim, who is also finance minister, said in a written reply to Parliament late Monday.
Shares in the budget carrier dropped as much as 5.5% to their lowest intraday level since November 2022. The stock has slumped 75% this year, making it the worst performer in the Bloomberg World Airlines Index.
Any request for government assistance would be assessed based on the national interest, the state of public finances and the need to protect taxpayer funds, Anwar said. The government has been holding talks with companies across the aviation industry as it assesses the impact of the conflict, as it does with other affected sectors, he said.
The government will continue to monitor these developments closely, Anwar said.
The Iran war has hit AirAsia hard, with the low-cost airline - which doesn’t hedge its fuel costs - posting two straight quarterly losses as jet fuel prices surged. That’s sparked growing scrutiny of the airline, which has said it’s seeking $1 billion in debt refinancing.
Bloomberg News has previously reported that AirAsia had sold six newly-delivered aircraft, a unit of AirAsia had fallen behind on payments to suppliers, and AirAsia Group was seeking to change the terms of a $200 million private credit loan.
Last month, the co-founder Tan Sri Tony Fernandes sought to ease concerns about AirAsia’s financial health, pushing back against the notion of a bailout and the idea that rivals could absorb some of its assets. The airline would emerge from its current crises stronger than before, he said, liquidity was solid, and no aircraft had been repossessed. - Bloomberg
