JAKARTA (TheInsiderStories) - Malaysian flight carrier, AirAsia X (AAX), has liquidated its Indonesia branch, AirAsia Extra, after operated since 2019, the company announced this week. The branch, was a joint venture of the company and PT AirAsia Indonesia Tbk (IDX: CMPP).
The unit of AirAsia Bhd has also written down the value of AirAsia X Thailand, a long-haul low-fare airline headquartered and based at Don Mueang International Airport in Bangkok to zero. The airlines is a joint venture of AirAsia X and Thai AirAsia.
On Oct. 6, AirAsia X announced a restructuring plan geared at facilitating an injection of fresh equity which will allow the airline to fly again. The issuer also appoints Dato’ Lim Kian Onn as the deputy chairman to lead the airline restructuring.
Currently, the company is facing severe liquidity constraints. Travel and border restrictions have grounded all scheduled flights and there is no imminent return to normalcy. An imminent default of contractual commitments will precipitate a potential liquidation of the airline.
A major debt restructuring and a renegotiation of its financial obligations are pre-requisites for any raising of fresh equity which will be required to restart the airline. For 13 years, AirAsia X, as a market leader in medium-haul low-cost flying, has delivered affordable flights to many destinations and created jobs for the airline, related travel and tourism industries as well as contributing to Malaysia’s GDP growth.
AirAsia X continues to engage all key business partners and hopes to enter into contracts, arrangements that are reflective and supportive of the airline’s revised business plan upon successful completion of the restructuring, which is critical to the future viability of the business.
The CEO, Benyamin Ismail, said, “AirAsia X and other airlines the world over are struggling to survive amidst the global crisis of COVID-19 pandemic. 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’ history as a consequence of the pandemic.”
He added, in order to safeguard Malaysia’ vested interest through the aviation industry, regional air connectivity is essential for trade, businesses and economic growth, especially to their core markets of China, Japan, Korea and Australia.
Despite the unprecedented setback brought by COVID-19, he added, this also provides an opportunity for AirAsia X to transform and reinvent the product and business strategy to emerge in a stronger and more sustainable financial position.
Written by Editorial Staff, Email: [email protected]
