Budget airline AirAsia X out of money, needs $120 million for restart

AirAsia needs to convince its lessors of its business plan, with an unnamed lessor recently taking back one of the airline’s planes to convert it to a freighter. (AFP)
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Updated 17 October 2020

Budget airline AirAsia X out of money, needs $120 million for restart

  • ‘Obviously, banks will not finance the company without shareholders, both old and new, putting in fresh equity’

Long-haul, low-cost carrier AirAsia X has run out of money and needs to raise up to $120.6 million to restart the airline, deputy chairman Lim Kian Onn said in a newspaper interview published on Saturday.
The Malaysian airline, the long-haul arm of AirAsia Group Bhd, said this month it wanted to restructure $15.32 billion of debt and slash its share capital by 90 percent to continue as a going concern.
“We have run out of money,” Lim told The Star newspaper. “Obviously, banks will not finance the company without shareholders, both old and new, putting in fresh equity. So, a prerequisite is fresh equity.”
He said the airline had actual liabilities of $482 billion, with the larger figure of $15.32 billion including all lease payments for the next eight to 10 years and its large order for Airbus planes and contracted engine maintenance with Rolls-Royce Holdings.
“If we find RM300 million in new equity, then the shareholder funds are RM300 million at the restart of business and if we are able to borrow RM200 million, we feel that we will have a good platform to start all over again,” he told The Star.
Lim said AirAsia X also needed to convince its lessors of its business plan, adding an unnamed lessor recently took back one of the airline’s planes to convert it to a freighter.
The airline plans to liquidate its small Indonesia-based carrier and has completely written down its stake in Thai AirAsia X in its books, with the Thai carrier not part of the restructuring scheme, Lim told the newspaper.
Rival Malaysia Airlines is also in financial trouble, but Lim said there would be “no good outcome” from seeking to merge two airlines in dire straits.
AirAsia X declined to comment beyond the details published in the newspaper article.


China aims for sustained and healthy economic development

Updated 30 October 2020

China aims for sustained and healthy economic development

  • Beijing to let market forces play decisive role in resources allocation, report says

BEIJING: China is targeting sustained and healthy economic development in the five years to 2025, with an emphasis on a higher quality of growth, the Xinhua news agency said on Thursday, citing the ruling Communist Party’s Central Committee.

President Xi Jinping and members of the Central Committee, the largest of the ruling party’s elite decision-making bodies, met behind closed doors from Monday to lay out the 14th five-year plan, a blueprint for economic and social development.

China’s external environment “is getting more complicated,” the agency said, adding, “There is a significant increase in instabilities and uncertainties.”

BACKGROUND

China aims to boost its gross domestic product (GDP) per person to the level of moderately developed countries by 2035, while GDP is due to top 100 trillion yuan ($15 trillion) in 2020.

However, the country’s development was still in a period of important strategic opportunities, despite new challenges, it said.

It added that China aims to boost its gross domestic product (GDP) per person to the level of moderately developed countries by 2035, while GDP is due to top 100 trillion yuan ($15 trillion) in 2020.

China will also deepen reforms and let market forces play a decisive role in resources allocation, the agency said.

China will promote a “dual circulation” model, make self-sufficiency in technology a strategic pillar for development, move to develop and urbanize regions, and combine efforts to expand domestic demand with supply-side reforms, it added.

The “dual circulation” strategy, first proposed by Xi in May, envisages that China’s next phase of development will depend mainly on “domestic circulation” or an internal cycle of production, distribution and consumption, backed by domestic technological innovation.