MOF denies approving financing, guarantee for AirAsia

 

The Finance Ministry (MOF) has denied approving or providing any government financial backing to any airlines following a report by Nikkei Asia that budget carrier AirAsia Group had secured a RM1 billion loan.

"The Ministry of Finance would like to clarify that it has not approved any government financing or guarantee to any airline," said an authorised MOF spokesperson this afternoon.

This came after Nikkei Asia reported that the loan would be made by a group of local banks under the Danajamin Prihatin Guarantee Scheme to help companies deal with the pandemic.

Nikkei Asia also quoted sources as saying that the deal would be 80 percent guaranteed by Malaysia's finance ministry and that disbursement was expected next month.

When contacted by Malaysiakini, an AirAsia spokesperson said that the airline would not be commenting on the Nikkei report.

The group, led by CEO Tony Fernandes, has already cut more than 10 percent of its workforce and plans to downsize its fleet of aircraft to try to contain costs.

Furthermore, it is believed that the company is asking more staff to agree to be placed on furlough from Nov 1, 2020, until April 30, 2021, while retaining 25 percent of their basic salary.

In an interview with Nikkei Asia in July, Fernandes revealed that the airline needed to raise RM2 billion in the next six months to be in a "very comfortable" position.

"At RM1 billion, we are comfortable. But if we can raise RM2 billion, we would be in a very comfortable position," he had said.

AirAsia said in July that it was in talks to raise more than RM1 billion in funds, a day after its auditor cast doubt on its ability to continue as a going concern.

Yesterday, Malaysiakini reported on the struggles of the airline industry as Malindo Air joins AirAsia in shedding more staff, while Malaysia Airlines is struggling to convince leasing companies on its restructuring plan. - Mkini