Financial aid for AirAsia crucial due to high multiplier effect

Financial assistance such as loans with easier terms to AirAsia Group is crucial in helping the struggling low-cost carrier to turn around as its recovery will bring about a huge spillover effect to the broader economy.

AirAsia X  chairman Tan Sri Rafidah Aziz reportedly said easier loan terms will not only provide the carrier with operating funds but also create a high multiplier effect in boosting and reviving the country’s economy.

She was quoted by Utusan Online as saying AirAsia is negotiating for bank loans with low-interest rates and longer tenures.

“We have a multiplier effect from flights which is 12 times, with every RM1 we bring in, another RM12 given to (economic) sectors such as hotels, resorts and restaurants, ” Rafidah was quoted as saying in the report.

She said countries understand, when the aviation industry opens, business people and tourists will come, so hotels and restaurants will resume operations and receive visitors

According to Rafidah, support and financial assistance is needed by the airlines affected by the enforcement of the Movement Control Order (MCO) to curb the Covid-19 pandemic.

She noted that no income is earned during the MCO period because flights in and out of the country are stopped while expenses continue to be incurred.

Rafidah said the Covid-19 pandemic situation has not stopped AirAsia from continuing to find new flight destinations.

However, she said, various aspects need to be looked at first including the number of visitors and fuel prices.