Key facts
- AirAsia co-founder Tony Fernandes denied reports of government bailout talks.
- Fernandes stated that no conversations with the government regarding a bailout have occurred.
- AirAsia reported a net loss of RM831 million for the second quarter.
- Jet fuel costs increased by 66% in the second quarter.
- Fernandes asserted that AirAsia's liquidity is over RM1 billion and its sustainability is not in question.
AirAsia co-founder Tony Fernandes has strongly refuted claims that the airline is seeking a government bailout or that the government has engaged in discussions about absorbing its domestic operations. The denials come in response to a Reuters report, citing unnamed sources, which suggested that Malaysian authorities had approached rival airlines, Malaysia Airlines and Batik Air, about potentially taking over AirAsia's domestic market share as part of scenario planning amid concerns over the carrier's financial health.
Fernandes described the report as "ludicrous" and "irresponsible," asserting that "no such conversations happened" and that the company does not require any form of rescue or bailout. He stated that AirAsia's liquidity exceeds RM1 billion and that its sustainability is not in question.
The reports emerged as AirAsia grappled with financial challenges, including a net loss of RM831 million for the second quarter ended June 30. The airline has been impacted by a significant surge in jet fuel costs, which rose 66% in the second quarter. Fernandes, however, argued that these challenges are less severe than those faced during the COVID-19 pandemic, as the airline is currently able to operate and demand for air travel remains strong. AirAsia is implementing cost-saving measures, such as returning older aircraft and renegotiating contracts, and is adjusting fares to account for higher fuel prices.