Long-haul low-cost airline AirAsia X yesterday announced a restructuring plan to help the airline get back on its feet. It was noted that the airline is currently facing severe liquidity issues amid the impacts brought on by the COVID-19 Pandemic that has caused many countries to put in place travel and border restrictions that adversely affect demand for air travel.
The press release also stated that, “An imminent default of contractual commitments will precipitate a potential liquidation of the airline” and added that the airline needs a major debt restructuring along with renegotiations of their financial obligations as preconditions to raise new equity which is vital for the airliner to restart operations.
The Board and Management after looking into their options have proposed a plan to restructure the airline (pending approval) which they believe will help the airline to secure business continuity.
The plan looks into 4 vital areas:
- Debt Restructuring Scheme
- Revision of the Group’s Business Plan
- Engagement with Business Partners
- Airline customer and Travel agents
The plan looks to essentially right size AirAsia X’s operations and financial obligations which are deemed crucial for business continuity and includes capital injections comprising of both the equity and debt to implement the revised business plan.
CEO of AirAsia X, Benyamin Ismail added that, “It has been extremely difficult for the airline during this period as we had to ground all scheduled flights, implement salary cuts and retrenchment for the first time in the company’s history as a consequence of the pandemic. Similar exercises are likely to continue during the restructuring process, but our focus is to ensure a successful restructuring to keep as many jobs as possible”.
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