Goodbye, AirAsia?

[reader]

From Bangkok Post

AirAsia's future in doubt due to virus

Malaysian budget carrier AirAsia's future is in "significant doubt" due to the collapse in demand for air travel caused by coronavirus, its auditor has warned.

The aviation industry is facing its biggest-ever crisis due to the outbreak, with airlines worldwide laying off huge numbers of staff while some have already gone out of business.

AirAsia, which shook up Southeast Asian budget air travel with its slogan "Now everyone can fly", Monday reported a record quarterly loss of 803 million ringgit ($187 million) for the first three months of the year.

Auditor Ernst & Young said Tuesday that "travel and border restrictions implemented by countries around the world has led to a significant fall in demand for air travel which impacted the group's financial performance and cash flows".

It noted the "existence of material uncertainties that may cast significant doubt on the group's and the company's ability to continue as a going concern", in an unqualified audit opinion statement to the Kuala Lumpur stock exchange.

Trading in AirAsia's shares was halted on Wednesday morning but resumed in the afternoon.

AirAsia Group Bhd shares slumped nearly 18% when trading resumed following the suspension. The budget airline pared its loss to 12% as of 3.40pm local time (2.40pm in Thailand). Trading was halted Wednesday until 2.30pm local time.

[reader]

AirAsia Update

From Reuters

Malaysia's AirAsia seeks nearly $500 million in funding

KUALA LUMPUR (Reuters) - Malaysia’s AirAsia Group Bhd is looking to raise 2 billion ringgit ($469 million), its CEO was quoted as saying by the Nikkei Asian Review on Thursday, a day after its auditor cast doubt on the airline’s ability to continue as a going concern.

AirAsia (AIRA.KL) said in a statement some financial institutions had indicated they would support a funding request of over 1 billion ringgit and that it was also considering various fundraising options, including debt and equity.

In an interview with the Nikkei Asian Review, Chief Executive Tony Fernandes said the airline would look to raise a total of 2 billion ringgit in the next six months.

“At 1 billion ringgit, we are comfortable. But if we can raise 2 billion ringgit, we would be in a very comfortable position,” Fernandes said in the interview.

=============================================================================================================

From The Nation

Thai AirAsia eyes flights out of Suvarnabhumi

In a bid to compete directly with Thai Vietjet Air, Thai AirAsia is planning to fly out of both Bangkok airports.

“We aim to deploy three to four planes from our fleet of 60 to operate direct flights from Suvarnabhumi Airport to provinces like Chiang Mai, Chiang Rai, Phuket, Krabi, Khon Kaen and Udon Thani,” said Tassapol Bijleveld, chief executive officer at Asia Aviation Plc (AAV). “Currently, Thai Vietjet Air is the only budget airline to fly out of Suvarnabhumi, and we see this as a good opportunity, now that the government has eased lockdown measures and allowed domestic flights to continue.

 

[Guest]

Air Asia has a brand and either Air Asia or their leasing company has all those Airbus aircraft parked up somewhere.

Even if Air Asia were to be liquidated, someone would buy up the aircraft and the brand name.   When demand resumes, the best way to earn a return on the capital invested in all those aircraft is to run an airline.    The airline might have a new brand, but it's probably cheaper to buy the Air Asia brand & operate under that name, to save the cost of respraying all those planes.

 

 

[Uranus]

3 hours ago, z909 said:

Air Asia has a brand and either Air Asia or their leasing company has all those Airbus aircraft parked up somewhere.

Even if Air Asia were to be liquidated, someone would buy up the aircraft and the brand name.   When demand resumes, the best way to earn a return on the capital invested in all those aircraft is to run an airline.    The airline might have a new brand, but it's probably cheaper to buy the Air Asia brand & operate under that name, to save the cost of respraying all those planes.

 

 

You seem to be an aviation expert. 

[Guest]

On 7/12/2020 at 1:19 PM, Uranus said:

You seem to be an aviation expert. 

Not at all.    No aviation specific expertise.   

Even if Air Asia is liquidated, the liquidator sells the planes and the brand name. 

Someone is on the other side of that transaction & as demand resumes, they operate the planes or lease them out to an operator.  

 

[Guest]

Thinking about this a little more, from a consumer perspective, a worse case scenario is if Air Asia were broken up and merged with the respective flag carriers.   Then the consumer has less competition and higher prices.   The important thing is to maintain competition.  

The one thing I am confident about, is when demand returns, all those planes will be back in the sky.  I just hope it's with Air Asia or a Newco, rather than a merger.