'Most ludicrous statement I've seen in 25 years': Tony Fernandes

KUALA LUMPUR: AirAsia Group founder and advisor Tan Sri Tony Fernandes dismissed a news report alleging the government is considering a contingency plan for the low-cost airline's collapse, calling the reports ludicrous. Fernandes stated that the government has not made such a claim and emphasized that replacing 100 airplanes in Malaysia is impossible, given their cost structure, brands, markets, networks, and interlining.

He expressed amazement at the headline suggesting the government is contemplating AirAsia's collapse, explaining that the funding AirAsia is seeking aims to reduce its cost structure, not to suggest the group's bankruptcy. The comments came after a Reuters report suggesting the government had approached Malaysia Airlines and Batik Air to absorb AirAsia's domestic routes and passengers as part of scenario planning while monitoring the airline's financial position.

However, Fernandes clarified that no decision was made to take over AirAsia's operations. The low-cost carrier faced a challenging second quarter due to soaring jet fuel prices caused by the US-Iran conflict, which sent fuel prices past $200 per barrel, while AirAsia sold tickets based on a $85 per barrel fuel price. Fernandes urged the public to await AirAsia's third-quarter numbers, which he believes will demonstrate the group's substantial cash reserves, indicating far from a liquidity crisis.

The airline is on track to carry 60 million passengers this year and aims to carry 80 million passengers next year, having carried 43 million passengers in the second quarter. Fernandes emphasized that the group will adjust its cost structure and fares, expecting liquidity to improve by the end of the third quarter. He added that if oil prices remain at the current level, all airlines will need to make similar adjustments.