Budget airline AirAsia X out of money, needs $120 million for restart

Long-haul, low-cost carrier AirAsia X Bhd has run out of money and needs to raise up to RM500 million to restart the airline, deputy chairman Datuk Lim Kian Onn said in a newspaper interview published today.

The long-haul arm of AirAsia Group Bhd said this month it wants to restructure RM63.5 billion of debt and slash its share capital by 90% to continue as a going concern.

“We have run out of money,” Lim said. “Obviously, banks will not finance the company without shareholders, both old and new, putting in fresh equity. So, a prerequisite is fresh equity.”

He said the airline had actual liabilities of RM2 billion, with the larger figure of RM63.5 billion including all lease payments for the next eight to 10 years and its large order for Airbus SE planes and contracted engine maintenance with Rolls-Royce Holdings plc.

“If we find RM300 million in new equity, then shareholder funds would be RM300 million at the restart of the business, and if we are able to borrow RM200 million, we feel that we will have a good platform to start all over again,” he said.

Lim said AirAsia X also needs to convince its lessors of its business plan, adding that an unnamed lessor recently took back one of the airline’s planes to convert it to a freighter.

The airline plans to liquidate its small Indonesia-based carrier and had completely written down its stake in Thai AirAsia X in its books, with the Thai carrier not part of the restructuring scheme, Lim said.

Malaysia Airlines Bhd is also in financial trouble, but Lim said there would be “no good outcome” from seeking to merge two airlines in dire straits.

AirAsia X declined to comment beyond the details published in the newspaper article.