Retail News CRM

Tag: airasia

  • AirAsia X plans stock issue to raise funds while cutting share capital

    AirAsia X plans stock issue to raise funds while cutting share capital

    Long-haul budget carrier AirAsia X is planning to broaden the extent of a planned capital reduction, and raise additional funding through a new share issue. AirAsia X aims to raise RM300 million from current shareholders plus another RM200 million from new investors – a total of RM500 million ($123 million).

    It describes the new share issue as a “critical component” of a restructuring program for the airline.

    “There are several scenarios envisaged within our business plan and the funds to be raised are adequate for each of these scenarios,” says the carrier.

    As part of the financial restructuring, the carrier is to broaden a planned capital reduction, reducing the issued share capital by 99.9% – rather than the previously-proposed 90%. This will involve cutting the share capital to RM1.53 million.

    “Credit arising from the proposed share capital reduction will be used to offset part of the accumulated losses,” says the carrier.

    AirAsia X is also intending to consolidate its stock with a conversion of every 10 shares into a single share.

    Shareholders’ funds after the capital reduction will remain negative, it says, but the consolidation will “provide a platform to seek fresh funding” from current shareholders.

    The company admits it has faced objections from “several” lessors who are among creditors from which AirAsia X needs to obtain approval for its debt restructuring plans.

    AirAsia X points out that this restructuring is necessary for the recapitalization. “A comprehensive reset of the airline is required to provide a platform to rebuild, and a vehicle attractive enough for investors to invest in,” it adds.

    It says it will “continue to engage” with its creditors in an effort to “allay their concerns”, stressing that the alternative is the liquidation of the carrier.

    AirAsia X argues that a “reset” with fresh equity and repositioning of the airline as a regional, medium-haul low-cost carrier will provide the “best economic returns” to creditors.

    Lees ook:

  • How low-cost airline AirAsia is transforming itself into a publisher

    How low-cost airline AirAsia is transforming itself into a publisher

    Sumit Ramchandani, the chief executive of AirAsia Media Group, explains to The Drum why the low-cost airline has pivoted to e-commerce, fintech and lifestyle pillars. With international business travel and the tourist industry on hiatus for much of 2020 (and surely 2021), AirAsia has had to alter the way it does business to keep itself flying.

    It has formed the AirAsia Media Group to consolidate its adtech, content and media-related solutions. AirAsia is keen to offer brands a new way of integrating adtech and data, focused on travellers and pop-culture in Asean.

    AirAsia is therefore able to play an important role in engaging travel consumers. It owns a wide variety of omnichannel media assets, its own first-party data and can rely on a workforce of over 20,000 employees, known affectionately as Allstars; more than 1,000 of whom are influencers in their own right.

    “It made sense for us to come up with a unique set of media offerings under AirAsia Media Group for marketers and unify them under a single group so as to maximize leverage from our ecosystem,” says Ramchandani.

    “With the AirAsia Media Group we intend to help solve the challenges related to media efficacy and attribution while offering solutions that eventually drive business results for our advertising partners.”

    He continues: “We see the media group as the engine to collate all our omnichannel advertising assets with our self-service adtech platform and enrich it with our intent-driven first-party data to create a results-oriented proposition for our advertising partners, from online to in-the-air, from origin to destination.”

    AirAsia’s target customers are diverse, from locals to international travelers to the pop-culture scene, says Ramchandani. This diversity is on display in the airline’s core market of Association of Southeast Asian Nations (ASEAN), where it partners with both agencies and brands, looking to drive transparency and measurable business outcomes from their marketing investments in this region.

    “Our partnership is either through direct buys based on campaign briefs or partnering for growth through our RedCarpet Channel Partnership. We believe that, as a publisher, we are in a unique position to drive full-funnel marketing and offer a strong conversion platform to showcase business results,” he explains.

    “Some of the clients we are currently partnering with include leading e-commerce players in fashion and lifestyle, established travel technology platforms, a rapidly growing local upstart in the automotive space and more.”

    From the ad inventory standpoint, AirAsia claims to have quadrupled its stock of quality media assets, all enriched with its targeted audience solution.

    Its RedCarpet channel partnership allows the airline to connect the dots across its online and offline ecosystem, inflight announcements and Allstars, to drive marketing results for advertising partners.

    “We are also progressing on a series of exciting new initiatives to enrich our engagement from our community base via content, chat and games,” says Ramchandani. “In addition to the above, in partnership with Universal Music Group (UMG), we are in the initial stages of a unique offering that combines fans, travel and talent in a manner that’s never been done before.”

    The partnership with UMG has seen the birth of RedRecords, a music label which will sign new artists from Asia. The label recently concluded an integrated campaign for singer Jannine Weigel, with the debut of her first single Passcode. The aim was to expand awareness for her first single through AirAsia Media Group’s ecosystem within Asean and establish Wiegel as an Asean star.

    The channel mix included digital media, which included homepage mastheads to that provided the volume and quality impressions, in-flight media, which included a slew of assets from branded livery on one of AirAsia’s Airbus A320 aircraft to meal tray backs, & in-flight music and announcements.

    Customer relationship management tools were also utilised as emails, airasia.com super app push notifications, while a branded channel used ‘Connect’, AirAsia’s in-app interactive chat and community channel.

    “In under a month, we managed to over-deliver on our reach target by 140% with a total of 2.9 million impressions at an engagement rate of 1.3% (36% above the category benchmark). During the campaign, Passcode owned 18.9% share of voice (SOV) on airasia.com, which was highest compared to any other campaigns running at that time,” Ramchandani claims.

    The focus for AirAsia now is to grow across Thailand, Indonesia, Philippines and Singapore. While ad inventory continues to remain as a hygiene, AirAsia is increasingly looking at redefining ads through its RedCarpet channel partnerships as the core of its 2021 strategy.

    Through the airasia.com super app ecosystem, the airline wants to look at creating more avenues for brands to find business growth, says Ramchandani.

    “After successfully forming channel partnerships with coffee brand ChekHup in Malaysia and Walch (hand washed and disinfectants) in Singapore, we are now in advanced discussions with some exciting brand solutions with regional partners in the fashion beauty and FMCG verticals,” he explains.

    “We also look forward to partnering with marketers and showcase how the AirAsia ecosystem can help achieve their marketing goals around quality data and leading up to conversion.“

    Lees ook:

  • AirAsia up 5.49% after Fernandes said he’s ‘quietly optimistic’ about 2021, in talks for three new airlines

    AirAsia up 5.49% after Fernandes said he’s ‘quietly optimistic’ about 2021, in talks for three new airlines

    AirAsia Group Bhd rose as much as 4.5 sen or 5.49% to a five-month high of 86.5 sen in early morning trade today after the group said it expects travel to return to pre-Covid levels in the next six to 12 months.

    At 10.09am, the counter had pared some gains at 85 sen, still up three sen or 3.66%.

    The counter, among the most actively traded stocks this morning, saw 24.33 million shares traded.

    The stock has rebounded 63.46% from its recent trough of 52 sen on Nov 3.

    At 85 sen, the company was valued at RM2.82 billion.

    In an interview yesterday, group chief executive officer (CEO) Tan Sri Tony Fernandes said he is “quietly” optimistic about 2021 with a focus on expanding the group’s base in Southeast Asia.

    He added that the group is in discussions about starting three new airlines in the region, and its plan to raise up to RM2.5 billion is on schedule.

    Meanwhile, Rakuten Trade head of research Kenny Yee said yesterday a successful development of Covid-19 vaccines would lift cross-border travel restrictions and worldwide travel bans, benefiting AirAsia.

    “AirAsia’s share price is in consolidation mode now following the previous run; we expect buying momentum to resume as it is one of the potential recovery plays,” he said.

    MIDF Research also in its report last Thursday upgraded the aviation sector to “neutral” from “negative”.

    “We foresee that air travel demand will recover meaningfully, but only at a portion of pre-pandemic levels in FY21 (the financial year ending Dec 31, 2021). With vaccine introduction and subsequent administration on the horizon, we believe that there is light at the end of the tunnel for aviation players,” it said.

    Lees ook:

  • AirAsia Group to reduce fleet size in 2021

    AirAsia Group to reduce fleet size in 2021

    AirAsia India will be the group’s only unit to see fleet growth by the end of 2021, amid an ongoing investment review conducted by the low-cost group.

    In slides presented at an analyst briefing following the release of its third-quarter results, AirAsia Group states in its outlook that it has “planned for a reduction in our fleet count to match our expected recovery” post-pandemic.

    AirAsia India looks set to expand its fleet by the end of 2021.

    The group, comprising units in Malaysia, Thailand, Philippines, Indonesia and India, anticipates a reduction of 23 aircraft by the end of 2021 to 221 aircraft.

    By the end of 2020, the group will have one less aircraft than the end of 2019. This is led by a decrease in fleet size from Thai AirAsia, as well as the now-shuttered AirAsia Japan.

    Malaysia-based AirAsia Berhad, as well as Indonesia AirAsia, will have zero aircraft growth for the year, while Philippines AirAsia and AirAsia India will expand their fleet by one and four aircraft respectively.

    Information from the AirAsia Group shows an overall fleet reduction of 23 aircraft by the end of 2021.

    By 2021, all of the group’s carriers, except AirAsia India, will reduce their fleet size by between one to eight aircraft. AirAsia India, meanwhile, will add one aircraft to its fleet.

    AirAsia India’s five aircraft addition between 2020 and 2021 is reported to be Airbus A320neos, of which it currently has two examples in its fleet.

    Indian media, citing an AirAsia India spokesperson, says the airline will be taking a third A320neo by December, with the remaining two aircraft arriving by 2021.

    AirAsia India, a joint venture with the group and Indian conglomerate Tata Group, was also reported to have its eyes set on expansion, with the carrier targeting to operate nearly two-thirds its pre-pandemic capacity, an increase from the current 55%.

    The carrier was most recently the subject of ongoing investment review, with AirAsia Group president for airlines Bo Lingam stating that “cost containment and reducing cash burns remain key priorities” for the group, which led to the closure of AirAsia Japan, and an “ongoing review of our investment in AirAsia India”.

    There were also rumors that the Tata Group could increase its shareholding in the carrier, effectively taking over AirAsia Group’s stake. In June, group chief Tony Fernandes was reported to be considering pulling out of the joint venture altogether. AirAsia Group has not publicly commented on the matter.

    The latest fleet update comes after the group said in April it was negotiating its outstanding orders with Airbus, and would be taking no new aircraft in 2020. The group’s earlier estimates indicate that AirAsia and AirAsia X were due to receive 14 aircraft in 2020, and a further 29 aircraft in 2021.

    Cirium fleets data shows the AirAsia Group to have more than 360 A320 family aircraft on order, the majority of them A321neos.

    Lees ook:

    Lees ook:

    Lees ook:

  • AirAsia X plunges deeper into red amid ongoing grounding

    AirAsia X plunges deeper into red amid ongoing grounding

    Troubled long-haul, low-cost carrier AirAsia X widened its quarterly loss, as it remained grounded amid the coronavirus pandemic.

    For the quarter ended 30 September, the carrier, which recently unveiled a restructuring plan, reported an operating loss MYR498 million ($122 million), a staggering seven-fold increase year on year. It was also higher than the previous quarter’s MYR323 million operating loss.

    Revenue for the period plunged 94% year on year to about MYR60 million, as the carrier reported zero revenue from scheduled passenger operations. AirAsia X remains grounded amid international travel restrictions aimed at curbing the pandemic’s spread.

    Revenue from cargo operations and charter flights — amounting to some MYR8.5 million — were not enough to stave off any further revenue loss.

    Meanwhile, expenses for the period fell 53% to MYR487 million, due mainly to its ongoing grounding, which has reduced flying activity.

    AirAsia X widened its net loss to MYR308 million, compared to MYR230 million the same period last year.

    The carrier gave no operational statistics for the quarter, stating: “[The] company has suffered the full impact of the Covid-19 pandemic and, with the suspension of scheduled flight operations in April, and the parking of the majority of the aircraft fleet, the performance indicators for the business are not meaningful.”

    In early October, the embattled carrier rolled out plans to restructure its debts — of around MYR63.5 billion — and trim its network and fleet. It said then that the restructuring — subject to approvals — was essential to its future.

    Under its revised business plan, AirAsia X aims to emerge as a low-cost medium-haul operator. The airline adds that it hopes to restart operations with two aircraft in the first quarter of 2021.

    Cirium fleets data shows that Air Asia X has a fleet of 23 A330-300s, 21 of which are in storage. The carrier owns five A330s and leases the rest from various lessors. It also has orders with Airbus for 10 A350s, 76 A330neos and 30 A321XLRs.

    Among plans outlined to return to profitabilty, AirAsia X says in its latest financial results that it plans to “focus on core markets to improve yield”. These include “focusing on mature routes in core markets with historically proven demand”, as well as axing unprofitable routes. It also plans to operate a “leaner fleet size” in the future, which will necessitate the return of excess aircraft to lessors.

  • Tata Group may increase stake in AirAsia India and plans to Rebrand it

    Tata Group may increase stake in AirAsia India and plans to Rebrand it

    Tata Group, which was reportedly in talks with AirAsia’s parent company AirAsia Group Berhad last week for a $50 million emergency funding to keep the carrier flying in India, is now planning to raise its stake in AirAsia India to more than 76 percent.

    Lees ook:

    Lees ook:

  • Airbus resells six unwanted jets built for AirAsia

    Airbus resells six unwanted jets built for AirAsia

    Airbus has found buyers for six aircraft from the A320neo family rejected by one of its main customers, Malaysia’s AirAsia, as it works off a surplus left by the coronavirus crisis, industry sources said.

    Unwanted jets have become an emblem of pandemic-induced problems in the aerospace industry that have come on top of a chill in ties between two of its major players.

    Tensions became unusually public when Airbus in April invited tenders for six jets that AirAsia had failed to take delivery of.

    It has now found homes for all six, the last of which is being delivered this month, a European industry source told Reuters. Airbus provided no comment.

    Airbus has been steadily increasing deliveries as it strikes deals with airlines to reschedule deliveries or store jets.

    It said last month it had reduced an overhang that it had been unable to deliver during the crisis by 10 units to 135 jets. The redeployment of AirAsia orders is expected to trim the surplus further as deliveries top output in November.

    Airbus is seeing strong demand, relative to the rest of the battered sector, for its A321neo jet, and the aircraft has broadly held its value, the European source said. It is sticking with plans to increase output of the single-aisle jets.

    The A321neo competes with the two largest versions of the Boeing 737 MAX, which won approval last week to re-enter service after a 20-month grounding in the wake of two crashes.

    Boeing is expected to re-sell dozens of 737 MAX whose buyers cancelled during the grounding, potentially depressing prices.

    According to the UK-based consultancy IBA Group, all aircraft have lost some value during the COVID-19 crisis but the A321neo is trading around 5% below its inherent value while the MAX is 10% below – hurt also by the recent grounding.

    Doubts remain, however, about demand for a larger Airbus, the A330neo, whose largest customer, AirAsia’s long-haul unit Air Asia X, is seeking new funding to survive.

    AirAsia said in April it would stop taking deliveries of all Airbus jets this year and review remaining orders.

    The move exacerbated concerns about demand in Southeast Asia, which was already struggling with overcapacity before the crisis.

    AirAsia’s relations with Airbus were further clouded when it was drawn into an Airbus bribery case before being cleared by local investigators, industry sources have said.

    AirAsia co-founders denied any wrongdoing in a sports sponsorship deal cited in a wider Airbus bribery settlement with prosecutors in January. The European source said AirAsia remained an important partner for Airbus.

    Lees ook:

  • AirAsia India plans expansion; to induct 3 more A320 neos by June 2021

    AirAsia India plans expansion; to induct 3 more A320 neos by June 2021

    Budget carrier AirAsia India plans to add three more Airbus A320 neo planes by June next year as part of its fleet and network expansion. The airline — a joint venture between Tatas and Malaysia’s AirAsia Investment currently has 32 aircraft, including two A320 neos inducted recently.

    In a statement to PTI, an AirAsia India spokesperson said the airline had signed an agreement for inducting five A320 neo planes last year.

    The Bengaluru-based airline took delivery of the first A320 neo in October and another one earlier this month.

    “We will be inducting our third Airbus A320 neo in December and we look forward to inducting our fourth and fifth A320 neo by June 2021,” the spokesperson said in the statement.

    The statement was issued in response to the queries sent to the airline’s managing director and chief executive officer Sunil Bhaskaran.

    On November 17, Malaysia’s AirAsia Berhad had said it was reviewing its investment in AirAsia India. Against this backdrop, there have also been concerns about the domestic airline.

    Indicating that AirAsia India is on an expansion path, the airline’s spokesperson said it is planning to scale up the capacity to 70 per cent from 55 per cent at present.

    “We are soon planning to amp up our capacity to 70 per cent,” the statement said.

    Domestic commercial flights were suspended for two months from March 25 to curb the spread of coronavirus infections.

    The Civil Aviation Ministry permitted increasing the capacity to 45 per cent with effect from June 27 from a maximum of one-third at the time of resumption of domestic flights from May 25. It was scaled up to 60 per cent from September 2.

    Airlines were allowed to operate at 70 per cent of the pre-COVID-19 capacity from November 11.

    Earlier this month, senior AirAsia India officials informed travel agents that it remains on the path of serving Indian market by growing its network and scale of operations.

    Lees ook:

  • Air Asia develops digital health pass

    Air Asia develops digital health pass

    Air Asia has launched its digital health pass, Scan2Fly, to streamline health document checks and determine eligibility to travel.

    Developed in partnership with analytics company GrayMatter, Scan2Fly has already launched on routes from Kuala Lumpur to Singapore, Surabaya, and Jakarta. About 4 in 10 passengers on these flights are already using the system, according to the airline.

    Scan2Fly will enable passengers to scan and upload medical certificates at the time of online check-in. Entry documentation required by the destination country, including Covid-19 test certificates, is verified in real-time. The airline said the technology, which helps travelers minimize contact with airport staff, will eventually be rolled out to other Air Asia destinations.

    Javed Malik, chief operating officer at Air Asia Group said:

    “Covid-19 gave us the opportunity to fast track numerous new technologies to make flying not only safe and affordable but also more hygienic and contactless. We believe this innovation, alongside numerous others that we are rolling out across Air Asia Group, will help restore consumer confidence and stimulate future air travel.”

    Air Asia’s proprietary digital health pass comes amid global efforts to harmonize standards in verifying passenger health data.

    Cathay Pacific and United Airlines are among carriers trialing CommonPass, a digital health pass developed by the World Economic Forum and Commons Project Foundation. International SOS, a travel security company, is also in the process of developing AOKpass with trials in the Middle East. Meanwhile, the International Air Transport Association (IATA) is in the final development phase of its IATA Travel Pass.

    Covid-19 testing and document verification is a priority for the airline industry as it lobbies governments for borders to reopen and international travel to resume.

    Some governments, including China, have regulations to ban airlines if a certain number of passengers test positive upon arrival. Digital health passes, like traditional passport and visa checks, can help airlines reduce the risk of penalties for non-compliance.

    “We have built Scan2Fly with both scalability and global compatibility in mind. Should there be an agreed global tracing app or vaccination app, our solutions can seamlessly integrate and or exchange relevant data as and when required,” Malik added.

    Lees ook:

    Lees ook:

  • Airasia joins forces with Turkish Airlines to prepare for return of international travel

    Airasia joins forces with Turkish Airlines to prepare for return of international travel

    In anticipation of a potential revival in international travel, airasia.com has partnered with Turkish Airlines to allow it to enhance its strong pan-Asia flight network.

    The collaboration will enable airasia.com to tap into Turkish Airlines’ comprehensive destination map, which is the world’s largest in terms of the countries and international points flown by a global carrier, the low-cost carrier said in a statement today.

    AirAsia Group chief executive officer Tan Sri Tony Fernandes said airasia.com welcomes the opportunity to promote Turkey as a major gateway to Europe, to prepare the airline once borders gradually reopen next year.

    “Today airasia.com with its comprehensive portfolio of travel and lifestyle products is well-poised to promote the best that Turkey and the wider European market have to offer.

    “We will continue to collaborate creatively with other industry players to stimulate travel demand and complete our product offering as the one-stop platform for all our customer’s travel and lifestyle needs,” he said.

    While using its virtual interlining technology, airasia.com will now be able to combine Turkish Airlines’ extensive flight inventory with AirAsia flights and offer itineraries with attractive discounted fares from normal fares.

    AirAsia said the partnership is expected to generate a substantial synergy between the two parties through the cross-promotion of destinations, with the mission of being proactively prepared to tap into forthcoming return of travel.

    Travellers can also enjoy the convenience and great value of an end-to-end product offers across airasia.com ecosystem, from flights to hotels and activities, it added.

    Lees ook:

  • AirAsia Japan files for bankruptcy in latest Covid casualty

    AirAsia Japan files for bankruptcy in latest Covid casualty

    AirAsia Japan Co has filed for bankruptcy with the Tokyo District Court after flagging last month it would cease operations in the country, as the coronavirus pandemic that’s wiped out travel globally took its toll.

    Flights between Japan and destinations such as Bangkok will continue to be operated by other AirAsia carriers.

    The Japanese arm of Malaysia’s AirAsia Group Bhd received a provisional administration order from the court Tuesday, it said in a statement.

    “Given AirAsia Japan’s current financial position, we regret to inform that AirAsia Japan is currently unable to settle the outstanding refunds,” the statement said. “We sincerely apologize for any inconvenience caused to customers who have used or booked AirAsia Japan flights.”

    AirAsia, which reported its largest loss on record in the second quarter ended June 30, has been under immense pressure this year as Covid-19 roils the aviation industry. Airlines globally have been plunged into crisis, with many cutting thousands of jobs and trying to secure funds for survival. Some, pushed to the brink, have gone out of business.

    The low-cost airline has also stopped funding its Indian affiliate, leaving the future of AirAsia India Ltd largely dependent on its majority shareholder, Indian conglomerate Tata Group. Long-haul budget arm, AirAsia X Bhd, isn’t faring much better, earlier this month submitting a new debt restructuring proposal to creditors.

    AirAsia Japan had already canceled all flights, including one between Nagoya and Taipei. Services operated to Japan by AirAsia’s other carriers in places like Thailand and the Philippines won’t be affected. International services to Japan from Malaysia, Thailand and the Philippines will resume as travel restrictions are eased and borders reopen, the airline said Tuesday.

    Customers who have booked AirAsia Japan flights can apply for a refund, which should be available from April next year, or they will receive a credit that can be used on any other AirAsia-operated flight.

    Lees ook:

    Lees ook:

    Lees ook:

  • Airasia.com Super Sale returns with a flurry of bargain offers

    Airasia.com Super Sale returns with a flurry of bargain offers

    airasia.com has launched a second Super Sale via its ‘super app’, offering a range of deals starting from as low as RM1.99 (US$0.48) from 16 to 22 November

    The airasia.com Super Sale made its debut last month, superseding the hugely popular AirAsia Free Seats sale.

    The airasia.com super app offers a range of products and services, including fresh produce, groceries, food deliveries, travel & lifestyle products, Muslim-friendly services, and health & wellness packages.

    airasia.com can be accessed via website or mobile app and customers can use BigPay Checkout for a seamless payment experience across all product lines.

    Throughout the airasia.com Super Sale period, shoppers can enjoy up to -50% off from selected merchants on airasia Fresh with a RM1 delivery fee. They can also get 50% off from selected merchants via airasia Food, the online food ordering platform which runs on a zero-commission model.

    Other deals include Buy 1 Free 1 for selected skincare, cosmetics, accessories and more on airasia Shop; -50% off with an additional -5% discount with the promo code ‘SUPER5’ for Unlimited Deals; -10% off Aqiqah Abroad and Aqiqah Makkah on Ikhlas; an aesthetics bundle from RM299 (US$73) on airasia Health and many more.

    airasia.com CEO Karen Chan said: “Since the launch of airasia.com as an Asean super app in October, we have continued to expand our market reach and diversify our product range across the region. We have recently launched the AirAsia Unlimited Pass in the Philippines, Thailand and Indonesia, and introduced airasia Health in Malaysia – a platform that provides end-to-end medical services.

    “We are also working on expanding our eCommerce presence within Asean through strategic partnerships and collaborations with technology providers, merchants and vendors.

    “The airasia.com Super Sale this time offers even more exciting deals as we have included more products and merchants. Through the Super Sale we are able to help further revive the many businesses that have been affected by the effects of the pandemic. We hope everyone will have an enjoyable time shopping and finding the best deals for travel, activities, food, rewards and more,” she added.

    On top of the discounts, shoppers can also earn 3x BIG Points when they pay with the AirAsia credit card during the airasia.com Super Sale. BIG members also have the option of paying using BIG Points.

  • AirAsia X makes creditor status concession to Malaysia Airports

    AirAsia X makes creditor status concession to Malaysia Airports

    AirAsia X has agreed to classify Malaysia Airports as a secured creditor, as it seeks to expedite its massive debt restructuring program.

    “After consultation, AirAsia X has accommodated [Malaysia Airports] and made certain clarifications and revised the scheme under two separate classes ’A’ and ‘B’,” says the carrier in a statement.

    “Class A shall consist of creditors who are considered critical or essential and who may have secured and/or other rights. Class B shall consist of creditors who do not fall within Class A.”

    In a separate stock exchange filing, AAX states that Malaysia Airports’ legal challenge contended that as a secured creditor it has the right to detain aircraft, parts, accessories, vehicles, and other equipment.

    AAX adds that it makes the status change “in the interest of time,” a reference that it hopes to come to an agreement with creditors in the first quarter of 2021. Announced on 6 October, AAX’s proposal calls for restructuring MYR63.5 billion into an “acknowledgment of indebtedness” for up to MYR200 million payable over the next five years at a 2% interest rate.

    Following the airline’s proposed debt restructuring on 6 October, Malaysia Airports filed a legal challenge protesting its being lumped in with unsecured creditors. Malaysia Airports is also suing AAX for MYR78.2 million ($19 million) in unpaid passenger service charges (PSC) – the subject of a long-running dispute between the two parties.

    The airline also notes that Malaysia Airports has threatened to take legal action against its directors in their personal capacity over the PSC issue, which it claims is “intimidatory in nature.”

    “AirAsia X also wishes to report that major creditors have all demonstrated great maturity, professionalism, constructive engagement and commercial realism in dealing with the debt restructuring exercise,” it says.

    “Though the process is on-going and a common consensus remains to be reached, AirAsia X looks forward to being able to present the revised scheme for all creditors to vote on early in the first quarter of 2021.”

    Assuming 75% of creditors go along with AirAsia X’s proposal and other approvals are obtained, AirAsia X basically aims to start afresh in 2021, initially operating a pair of A330s, and working up to a full network by the end of next year.

    Creditor BOC Aviation has also opposed the restructuring via legal means, with a challenge in the High Court of Malaya on 14 October. In September, before AAX announced its restructuring, the lessor filed a claim against the carrier for nearly $23 million in a London court.

    AAX, lossmaking even before 2020’s coronavirus pandemic, faces an existential crisis owing to the collapse in international air traffic to and from Malaysia this year. In the second quarter, operating losses widened to MYR323 million on revenues of MYR91.4 million, which were down 91% from a year earlier. Its cash and cash equivalents at 30 June stood at MYR212 million, down 31% from three months earlier.

    The airline operates 41 A330s, of which 18 are leased. It also has orders for 116 Airbus jets comprising 76 A330neos, 10 A350-900s, and 30 A321XLRs.

    Lees ook:

  • AirAsia X set to amend debt revamp plan

    AirAsia X set to amend debt revamp plan

    AIRASIA X, the low-cost long-haul affiliate of AirAsia Group Bhd, is expected to file an amendment to its originating summons next week, to make its debt restructuring proposal more palatable to the 1,200 unsecured creditors that the airline is asking to write down their dues.

    This was disclosed to Kuala Lumpur High Court Judicial Commissioner Anand Ponnudurai by the lawyer for AAX last Friday (Oct 30). The matter came up before Anand at a case management hearing of an application by several of AAX’s unsecured creditors to intervene in the airline’s application for leave to hold a creditors’ meeting to vote on its proposed debt restructuring scheme.

    Sources say AAX seeks to amend its originating summons, as well as some of the terms of its proposed scheme. This comes as more lessors and creditors have come out against AAX’s proposed scheme that was disclosed on Oct 6.

    Under its proposed scheme, AAX is seeking to get at least 75% of the total debt value of its unsecured creditors to agree to take a 99% haircut, effectively cutting RM2 billion in current debts and another RM61 billion in future liabilities to RM200 million. It also entails undertaking a 90% share capital reduction to RM150 million from RM1.53 billion currently, and a consolidation of every 10 existing shares into one consolidated share.

    It is learnt that apart from airport operator Malaysia Airports Holdings Bhd (MAHB) and aircraft leasing company BOC Aviation Ltd, Macquarie Aircraft Leasing Services (Ireland) Ltd, Sky High I Leasing Co Ltd and three other creditors are the latest to file an intervention application for their objections to the proposed debt restructuring scheme to be heard. Oct 30 was initially the date of the hearing for AAX’s application for leave to convene the creditors’ meeting for purposes of voting on the proposed scheme.

    Sources say during the case man­agement hearing, AAX had no objections to the intervention application filed by the creditors, which means the concerned parties are allowed to intervene and take a position in terms of the proposed scheme.

    According to sources, Anand has also decided to recuse himself from the case, as he had previously appeared on behalf of AirAsia in its dispute with MAHB and the Malaysian Aviation Commission before he was pulled from private practice into the judiciary last November.

    It is understood that another case management would be held next week to fix the leave hearing for the concerned creditors to raise the reasons for their objections to the proposed debt restructuring scheme. This is likely to be held before Judicial Commissioner Ong Chee Kwan.

    “At the leave hearing, the creditors will then state if they think the proposed scheme is not good, unfair, or that they want to be excluded from the scheme,” one source said.

    Sources also say the hearing date for AAX’s application for leave to hold the creditors’ meeting to vote on its proposed scheme is also expected to be fixed at next week’s case management hearing. “Depending on the judge’s schedule and subject to the availability of all the lawyers (representing the scheme creditors), the hearing could be held at the end of November or early December. Of course, it is best for AAX to hold the creditors’ meeting as soon as possible,” another source adds.

    On a recent report that AAX plans to revise its scheme to address concerns raised by MAHB to be excluded from it — as the airport operator takes the view that it is a secured creditor — sources say this was not raised during the case management hearing on Oct 30. “There is nothing formal to suggest their removal (from the scheme) at the moment,” says one source.

    At the case management hearing, AAX was represented by Foong & Partners with Gopal Sreenevasan as its lead counsel. MAHB and Sky High were represented by Claudia Cheah of Skrine while BOC Aviation and Macquarie were represented by Kwan Will Sen and Joyce Lim of Lim Chee Wee Partnership. David Hoh, counsel for Abdullah Chan, represented three other creditors.

    On Oct 22, MAHB announced that it was suing AAX to recover RM78 million in outstanding aeronautical charges. The debt that it is owed is less than 0.01% of the total debt owed in the proposed scheme, it added.

    BOC Aviation had also filed an intervention application in the court for its objections to the proposed scheme to be heard. It is seeking about US$30 million in dues from AAX.

  • Malaysia Airlines and AirAsia, once contrasting, now face same crisis

    Malaysia Airlines and AirAsia, once contrasting, now face same crisis

    Struggling flag carrier Malaysia Airlines’ previous attempt turn itself around collided with low-cost local rival AirAsia Group’s rise. Now, both companies have run into the same turbulence.

    Malaysia Airlines, which has yet to recover from two 2014 tragedies that made global headlines, faces a growing risk of being forced to halt flights unless it secures aid. But the state has frowned on the idea of another bailout.

    A group of creditors recently rejected a proposal by Malaysia Airlines to restructure its 16 billion ringgit ($3.85 billion) in liabilities. This comes after the company made deep pay cuts for management and pilots, as well putting staff on unpaid furloughs to reduce costs as the coronavirus pandemic paralyzed global air travel.

    This disruption has also clouded the prospects for leaner AirAsia Group, which together with the flag carrier holds a majority market share in the country.

    “Our partners and creditors will have to sacrifice for the better of the future,” Izham Ismail, group CEO of Malaysia Airlines, told The Edge Malaysia newspaper in mid-October. “If they don’t want to help themselves to survive, I have no choice but shut it down.”

    Malaysia Airlines revealed that it entered into debt restructuring negotiations with creditors in early October. The airline called on leasing companies and suppliers to cooperate with the turnaround effort. If the creditors had agreed, the restructuring would have been completed within the next few months, according to Malaysia Airlines’ plan.

    The government has expressed its unwillingness to embark on another public-sector bailout of the national carrier, which is fully owned by the sovereign wealth fund Khazanah Nasional.

    “The Ministry of Finance will not be injecting any cash or any capital into Malaysia Airlines through Khazanah,” said Finance Minister Tengku Zafrul Aziz. A proposal has been floated to liquidate the airline and transfer a portion of the assets and staff to Firefly, the group’s low-cost carrier.

    Khazanah first took over Malaysia Airlines in 2001 following the ravages of the Asian financial crisis, holding a stake of 69%.The carrier’s fortunes turned again in 2014, when flight MH370 disappeared mysteriously en route from Kuala Lumpur to Beijing. This was followed months later by flight MH17 being shot down over Ukraine.

    The two tragedies drove away passenger traffic, prompting Khazanah to acquire the remaining shares in Malaysia Airlines and fully nationalize the carrier. Malaysia Airlines laid off roughly a third of its staff in a bid to revive its earnings.

    This previous restructuring effort never bore fruit because of competition from powerful rival AirAsia. The budget carrier made great strides in the 2000s with its low fares, eventually gaining control of half the domestic market.

    Malaysia Airlines, meanwhile, has lost money since 2011. Part of the problem is Malaysia’s unstable political situation. Former Prime Minister Mahathir Mohamad’s government sought capital and operational tie-ups with foreign carriers after determining that Malaysia Airlines could not heal itself. Japan Airlines was seen as a leading candidate to sponsor a turnaround due to the company’s experience recovering from bankruptcy.

    But Mahathir abruptly resigned and was succeeded by Muhyiddin Yassin this March. Not only has the pandemic sapped the finances of any potential sponsors, but Muhyiddin has his hands full maintaining his hold on power. Malaysia Airlines’ restructuring took a back seat.

    “None of the restructuring went deep enough,” said Brendan Sobie, an independent analyst. He added that it is too early to tell if the proposed debt restructuring plan would be sufficient.

    “All airlines face an incredibly challenging outlook,” Sobie said. “A lot will depend on how quickly the market recovers and if it fully recovers.”

    AirAsia planes sit at Kuala Lumpur International Airport on Oct. 6. The budget airline has not been immune to the effects of the pandemic   © Reuters

    Because Malaysia Airlines is the flag carrier, observers believe the government will ultimately be forced into a new bailout. But the damage to corporate value may have already been done by the drawn-out restructuring process.

    Other flag carriers in the region have been faster to rehabilitate. Singapore Airlines, which is majority-owned by government investment group Temasek Holdings, came out with a $10.5 billion fundraising plan in March that leans on existing shareholders. Thailand, which holds 51% of Thai Airways International, signed off on a court-supervised rehabilitation process for the carrier in May.

    Long profitable private-sector carrier AirAsia has not been immune to the effects of the pandemic, and it has sought to steer out of its slump.

    The group founded by CEO Tony Fernandes won Malaysian state backing of a 1 billion ringgit loan in October. Early that month, the group’s long-haul carrier AirAsia X applied in court for a debt forgiveness plan that would slash 63.5 billion ringgit in liabilities, including aircraft purchase commitments, to just 200 million ringgit.

    The plan still needs the approval of creditors holding 75% of the debt. AirAsiaX said the debt relief is needed “to avoid a liquidation and to allow the airline to fly again.”

    AirAsiaX — which offers flights to Australia, Hawaii and other Asia-Pacific destinations — operated at a loss in the most recent two years.

    AirAsia Group said in October it would end its Japan operations, and analysts expect further cutbacks in scale. The group posted a 992 million ringgit net loss for the April-June quarter on a 96% plunge in revenue.

    “AirAsia was a profitable airline and was potentially sustainable had it not added capacity rather recklessly,” said Nungsari Ahmad Radhi, ex-executive chairman of the Malaysian Aviation Commission. “It got to the point where the seat growth probably outstripped demand growth. The pandemic was a fatal blow.”