Fernandes shoots down talk of govt bailout for AirAsia

AirAsia Group Bhd co-founder and adviser Tony Fernandes has denied that the low-cost carrier is seeking a government bailout, saying its operations remain sustainable.

Fernandes said AirAsia had never sought government assistance throughout its 25 years of operations.

He also dismissed reports the government had approached rival carriers about absorbing some of AirAsia’s domestic routes, saying Putrajaya had confirmed to him that no such discussions took place.

“There is no government bailout. I don’t know where these stories are coming from,” he told an online media briefing today.

“We have built this airline through our blood, sweat and tears. There is no sugar daddy or sugar mummy here.”

Fernandes said another carrier could not simply take over AirAsia’s operations and replicate its cost structure, network, and market position.

“You’ve got to have our cost structure to get our fares. You cannot just say, ‘Oh, this airline is going to take AirAsia’s capacity’. I mean, it’s the most ludicrous statement I have seen in 25 years,” he said.

Reuters reported on Sept 16, citing sources familiar with the matter, that Putrajaya had asked Malaysia Airlines and Batik Air whether they could take on some of AirAsia’s domestic market share.

The report said the request was part of scenario planning as authorities monitored the financial health of Southeast Asia’s largest low-cost airline.

Fernandes also said AirAsia was not seeking US$3 billion in fresh capital, and that the airline was seeking US$1 billion to refinance existing loans and repay some creditors instead.

He said all of AirAsia’s loans were denominated in US dollars while its earnings were spread across the ringgit, Thai baht and Indonesian rupiah, and that the refinancing was aimed at better matching debt to earnings currencies.

“I don’t want more debt. I don’t like debt. I don’t think anyone here likes debt, right? We want to be debt-free,” he said.

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