Govt-AirAsia discussions ongoing, says deputy transport minister

KUALA LUMPUR: Deputy Transport Minister Datuk Hasbi Habibollah informed Business Times that government discussions with AirAsia Group Bhd are ongoing, though he did not disclose specifics. The Deputy Transport Minister clarified that the talks are still at the discussion level, hence he cannot comment further. He was asked about a financing package or government underwriting of loans, to which he reiterated that it is still under discussion.

This follows earlier reports of AirAsia's financial struggles amid soaring jet fuel prices, and the airline's attempts to secure additional funding. The Finance Ministry had previously stated on October 19 that no agreement or commitment had been made to provide financial aid to AirAsia, whether through guarantees, loans, or public fund injections.

The ministry emphasized that any such request would be evaluated based on national interests, fiscal sustainability, and public funds protection. Former Transport Minister Anthony Loke also stated on October 27 that a decision on financial support was still under review by the Finance Ministry. AirAsia co-founder and advisor Tan Sri Tony Fernandes previously denied the need for a government bailout, stating that the airline remains financially stable despite higher operating costs.

Fernandes told Reuters that discussions with government officials had centered on aviation-related costs, not financial assistance. AirAsia Group Bhd had announced plans in September 2 to raise up to RM4.74 billion to refinance existing debt and enhance its balance sheet, primarily by tapping international debt markets and securing local credit facilities.