AirAsia 'not too big to fail': Strategist
KUALA LUMPUR: Any government assistance for AirAsia Group Bhd should focus on preserving air connectivity, while leaving the airline to resolve its financing needs through private markets, an aviation strategist said.
An aviation strategist has stated that AirAsia Group should not be considered "too big to fail" despite its importance to Malaysia's economy. The strategist emphasized that the airline's failure would not lead to the collapse of the country's monetary or financial sector. Instead, AirAsia is crucial for domestic and regional connectivity, low-cost travel, tourism, and employment.
The strategist suggested that the government should focus on preserving air connectivity, while allowing AirAsia to resolve its financing needs through private markets. Any government support should aim to safeguard public funds and ensure regulatory stability, rather than absorbing commercial risks. AirAsia is currently seeking up to US$1 billion from international debt markets and RM700 million in local credit facilities to restructure its debt and consolidate its balance sheet.
The airline reported a net loss of RM830.5 million in the second quarter of 2026, primarily due to higher fuel costs and foreign exchange losses. AirAsia's role in Malaysia's economy extends beyond flying, contributing to tourism, hospitality, and job creation.
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