As AirAsia's long-haul arm AirAsia X remains grounded amid the COVID-19 pandemic, the AirAsia Group announced the carrier will be a part of a new restructuring program to secure much needed funding to allow for the future resumption of operations.
Citing “severe liquidity constraints,” the airline warned in a statement that an “imminent default of contractual commitments will precipitate a potential liquidation of the airline.”
While other AirAsia subsidiaries have resumed operations, the long-haul arm of the budget group remains grounded because its network covers mostly international routes.
Facing travel and border restrictions, the airline plans to restructure its debts and revise the group's business plan. When referring to this action, AirAsia listed the options being considered which includes reviewing its route network and fleet.
During the process, the airline also pledged to work with its business partners and to enter into contracts and agreements that are “reflective and supportive of the airline’s revised business plan upon successful completion of the restructuring.”
To lead the restructuring program, AirAsia announced the appointment of Dato' Liam Kian Onn as Deputy Chairman of AirAsia X. According to the airline group, Onn has been a member of AirAsia X's board since 2012.
Regarding the decision and plan, AirAsia X CEO Benyamin Ismail said: “AirAsia X and other airlines the world over are struggling to survive amidst the global crisis of COVID-19 pandemic. We remain committed to our guests, Allstars, business partners and shareholders to ensure we build a viable and sustainable airline for the long-haul, and for the survival of this airline, the proposed restructuring plan is our only option.”
Ismail added: “In order to safeguard Malaysia’s vested interest through the aviation industry, regional air connectivity is essential for trade, businesses and economic growth, especially to our core markets of China, Japan, Korea and Australia where we have established a strong foothold. The closure of these markets can impact the stimulus spending, GDP contribution and employment within the supply chain of the aviation industry. As other airlines struggle in the current market condition, AirAsia X strives to emerge stronger once the market recovers. Our immediate focus is to obtain all necessary approvals and execute the proposed restructuring plan over the next few months.”
AirAsia also addressed customers with bookings and AirAsia X Unlimited Pass holders, saying they will receive travel credits with extended validity for future bookings or to purchase seat inventory.