AirAsia's Fernandes says carrier can withstand jet fuel cost spike
Speaking at a media briefing, Fernandes said AirAsia was adept at managing cash and expected to raise more than $1 billion, mostly to refinance existing debt, by December or January.
AirAsia co-founder Tony Fernandes stated during a media briefing that the low-cost carrier possesses sufficient liquidity to manage soaring jet fuel costs. He expected to raise over $1 billion, primarily for refinancing existing debt, by December or January. Fernandes attributed this resilience to AirAsia's strong cash management skills and the airline's robust demand.
The company's current liabilities were approximately 18.4 billion ringgit ($4.52 billion) as of June 30, with cash and bank balances of 954 million ringgit. During the second quarter, fuel costs surged by 66 percent, reaching an average of $183 per barrel, and AirAsia has no hedging in place for fuel prices. Despite a 24 percent drop in share value since the Reuters report, Fernandes emphasized that the company had not received any government support and did not seek any.
AirAsia is in talks with international financial institutions for up to $1 billion in debt and 700 million ringgit in local credit facilities to restructure its debt. The company aims to balance its cost structure, brand, and network, as it holds a significant 60 percent share of Malaysia's domestic market. AirAsia is also exploring opportunities in Indonesia, the Philippines, and Thailand, with optimistic forecasts for the fourth quarter and upcoming announcements regarding its growth strategy with Airbus.
Written by urgent.news from The Jakarta Post's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
