AirAsia denies state bailout rumours

AirAsia Group Bhd co-founder and adviser Tony Fernandes has firmly rejected the notion that his low-cost carrier is requesting a government bailout. Fernandes emphasized that AirAsia has never relied on government assistance during its 25 years in operation and dismissed rumors suggesting the Malaysian government had approached rival airlines to take over some of its domestic routes. The Malaysian prime minister's office had confirmed to Fernandes that no such discussions had taken place.

Fernandes stressed that there is "no government bailout" and expressed disbelief at the origin of such stories. He affirmed that the airline was built through the hard work and dedication of its founders and employees, without any external financial support. Fernandes also pointed out that another airline could not simply seize AirAsia's operations and replicate its low-cost model, network, and market position.

The unique cost structure and operational advantages of AirAsia are crucial to maintaining its competitive fares, he explained.

Regarding financial support, Fernandes clarified that AirAsia was not seeking the US$3 billion in fresh capital reported by Reuters. Instead, the airline is looking to refinance existing loans and repay some creditors, amounting to US$1 billion. This refinancing effort aimed to better align the currency of AirAsia's debt with its earnings, which are generated in various currencies such as the US dollar, ringgit, Thai baht, and Indonesian rupiah.

Fernandes reiterated that all of AirAsia's loans were in US dollars, while its earnings were spread across multiple currencies, making refinancing a strategic move to improve financial stability. His primary goal was to reduce debt, not accumulate more.