‘Our focus is to ensure a successful restructuring to keep as many jobs as possible’, says CEO
AirAsia X, the Malaysia-based long haul low-cost airline, this week announced plans for a major restructuring plan to avoid bankruptcy and resume flights.
The proposal will tackle two areas — debt and corporate restructuring — and aims to manage over MYR63.5 billion in debt. This will also be a chance for the carrier to update their business model “to survive and thrive in the long term”.
Read more: SIA Group to slash about 4,300 jobs
AirAsia X CEO Benyamin Ismail said the proposed plan was the group’s “only option” to ensure the airline’s survival.
“It has been extremely difficult for the airline during this period as we had to ground all scheduled flights, implement salary cuts and retrench staff for the first time in the company’s history as a consequence of the pandemic,” Ismail said.
“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.”
Read more: Thai Airways files for bankruptcy amid COVID-19
In a statement, the airline said the proposed corporate restructuring is subject to the approval of the shareholders and the confirmation of Malaysia’s High Court, reported The Star.
They expect to complete the proposals by the end of the first quarter of 2021.
AirAsia X’s new deputy chairman Datuk Lim Kian Onn will take the lead in ensuring the airline will be able to fly again. Lim was a former investment banker and director at the carrier.
AirAsia is the latest airline is the region to fall victim to the debilitating impact of COVID-19 on the aviation sector. Many others, including Singapore Airlines and Cathay Pacific continue to struggle to stay afloat, even with government bail out support.
Read more: Cathay Pacific rejects additional wage relief support
Following the announcement, the Malaysian government made clear that they won’t bail out the country’s major airlines, including AirAsia.
“The government feels at this point in time that we will not bail out any airlines,” Finance Minister Tengku Zafrul Tengku Aziz said in a CNBC interview.
“It’s up to the shareholders of the respective airlines to provide any support that they feel appropriate and necessary.”
