Tony Fernandes speaks during an interview in Kuala Lumpur, Malaysia, on February 27, 2015.
AirAsia Group plans to raise as much as 2.5 billion ringgit ($604.6 million) this year through borrowings and share sales to provide the loss-making carrier ample liquidity to weather the negative impact of the Covid-19 pandemic.
The airline, controlled by tycoon Tony Fernandes, reported its seventh consecutive quarter of net losses on Thursday as travel restrictions and the lockdown imposed by the Malaysian government to curb the spread of the pandemic dampened sales. It posted a loss of 767.4 million ringgit in the first quarter, compared to 803.8 million ringgit a year ago, according to the company’s filing to Bursa Malaysia.
AirAsia has already raised 336 million ringgit from two tranches of private share placements earlier this year and is in talks with financial institutions to obtain additional funding as well as lessors to restructure existing aircraft lease arrangements. The company is also in discussions with potential partners that could invest in specific segments of the group’s business.
“Through these various fundraising exercises that the group is working on, the group foresees it will have sufficient liquidity to sustain the business operations,” the company said in statement.
Airlines and other travel-related industries have been among the hardest hit by the pandemic as countries around the world closed their borders to contain the virus. As infections in Malaysia continued to increase, AirAsia said revenue slumped 91% to 205.1 million ringgit from a year ago.
"Even if borders remain closed, the group is well prepared to rely solely on domestic operations alone this year,” it said. “We remain focused and committed to further strengthen our domestic position at this juncture as we await developments in regards to international air travel."
Fernandes and his business partner, Kamaruddin Meranun, took over AirAsia in 2001 to build a low-cost carrier that would make air travel affordable for the regular person. He had a net worth of $335 million when the Malaysia Rich List was last published in March last year. Fernandes, 57, also has interests in hospitality, insurance and education.
