Malaysia's finance ministry hires adviser to assess AirAsia's funding needs

Malaysia's finance ministry has enlisted the help of Alton Aviation Consultancy to evaluate AirAsia's funding requirements, following the Southeast Asian budget airline's mounting financial struggles, according to three sources with knowledge of the matter. This move suggests the Malaysian government is considering potential assistance for AirAsia, with the public interest and broader economic implications taking center stage in their deliberations.

The government's engagement stems from AirAsia's significance as a major employer and provider of affordable air travel throughout the region, as one source explained. They added that the ministry has been closely monitoring the situation over several weeks. However, it remains unclear whether AirAsia would require government endorsement to attract capital from external investors, and the exact form of any support is uncertain.

While the Malaysian finance ministry, AirAsia, and Alton Aviation Consultancy have not commented on the matter, the sources did not grant interviews due to the information's unavailability. In October 2021, AirAsia's parent company, Capital A, obtained approval for an 80% government-backed loan of up to RM500 million to address working capital needs post-pandemic. However, the loan did not go through as it would have required guarantees from co-founders Tony Fernandes and Kamarudin Meranun.