KUALA LUMPUR, April 2 — AirAsia was negotiating for loans instead of an outright bailout from the federal government, co-founder Tan Sri Tony Fernandes has revealed.
While saying his airline has sufficient reserves to sustain it at least until the end of the year, Fernandes added that a government loan would help the company’s cash flow situation during the current Covid-19 pandemic.
“No bailout, we don’t need a bailout; obviously many airlines are looking at loans.
“We think the cash will last us for the most part of this year and if we return (to business) then we will be okay.
“But I think it will be great to get a loan as well and we are looking at that with our government,” he said during a phone interview with Bloomberg TV.
As of the end of 2019, AirAsia reportedly had RM2.2 billion in reserves, with Fernandes suggesting the airline’s regional subsidiaries would also seek loans from the countries where they are based.
“If available in Malaysia or Thailand and such, we’d be looking down those lines, but we have enough cash to last us quite a while for the moment,” he said.
Fernandes acknowledged that the government is currently occupied with handling the pandemic, but is confident that the administration would eventually come to the aid of the aviation industry.
“Looking at the government, their efforts are for the people and the ones most in need and I think we are going industry by industry.
“We have made our recommendations to the government and I am sure in the not so distant future something will come.
“The aviation industry, it's a big contributor to the Malaysian economy; so we are sure that some of our suggestions will be listened to,” he added.
When prodded on the possibility of a merger between AirAsia and Malaysian Airlines, Fernandes ruled this out for the near future but was open to this at a later stage if this could be profitable.
“We will focus on ourselves to make it strong enough but we are going to keep quite a few options open.
“It will be very silly of me and our board to close all options, but it’s not being discussed at the moment,” he quipped.
Global travel restrictions have hit aviation companies after being forced to ground their fleet in order to mitigate the global spread of the Covid-19 coronavirus.
Inbound and outbound travel to and from Malaysia has been halted since March 18 following the implementation of the movement control order that tentatively ends on April 14.
Related Articles Singapore to shut schools, workplaces in new coronavirus measures Israel seals off ultra-Orthodox town hit hard by coronavirus Sex workers stranded in Germany as coronavirus shuts brothels