Govt must weigh AirAsia’s economic role before deciding on aid, says MP

 Julau MP Larry Sng says ensuring AirAsia's continued operations is important for the national economy.

Julau MP Larry Sng said AirAsia’s continued operations were important to ensure air travel remained accessible to the public. (EPA Images pic)

PETALING JAYA:

The government should consider AirAsia’s contribution to tourism and the national economy before deciding whether to provide assistance to the airline, an MP said.

Debating the 2027 budget, Larry Sng (PBM-Julau) said the low-cost carrier played an important role in connecting people, supporting tourism and providing affordable air travel.

“The government should consider the importance of air connectivity to the tourism sector and its contribution to the economy before making any decision on the assistance,” he said in the Dewan Rakyat.

Sng said the airline’s continued operations were important to ensure air travel remained accessible to the public.

“If AirAsia shuts down, I don’t think everyone will be able to afford to fly. I believe ensuring AirAsia continues to operate is important for the national economy.”

Last week, Reuters reported that AirAsia co-founder Tony Fernandes had met officials from the finance and transport ministries to discuss aviation-related costs, amid concerns about the airline’s financial position.

The report, citing three people familiar with the matter, said discussions had also centred on the possibility of the government backing AirAsia’s fundraising efforts, subject to proposed conditions that were still under discussion.

However, Fernandes said the meetings focused on aviation-related costs, including airport charges and fuel, and that there had been no discussions about financial assistance. He also denied approaching the government for help.

Fernandes said he remained confident AirAsia could navigate the difficult period without government assistance but added that the airline would not turn down help if it was offered.

The airline has been hit by rising jet fuel costs and reported a net loss of RM831 million for the second quarter ended June 30, partly due to higher fuel expenses and foreign-exchange losses.

Reuters also reported that AirAsia was seeking to raise up to US$1 billion from international debt markets and secure RM700 million in local credit facilities, primarily to refinance existing debt. - FMT