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AirAsia X CEO says airline has made "substantial progress" in talks with creditors
September 20th 2021
Malaysia's AirAsia X CEO, Benyamin Ismail reveals the LCC has made “substantial progress” in talks with creditors as reports emerged of a wider deal by AirAsia Group to renegotiate aircraft contracts with Airbus worth tens of billions of dollars. Read More » Ismail told Reuters AirAsia X (AAX) hoped to complete discussions with potential investors for a recapitalisation by year end and hold a meeting with creditors by the end of October. He said talks with creditors were in the final stages and all had indicated they want to see the airline proceed with its restructuring The company later issued a statement confirming hopes for a late October creditors’ meeting.
It said good progress has been made on substantial issues with lessors, Airbus, Rolls-Royce and service providers but that “final negotiations are still ongoing, particularly with respect to commercial arrangements going forward”.
An AirAsia spokeswoman contacted by Orient Aviation declined to comment on the aircraft contracts report but Airbus is AirAsia X’s biggest creditor. Reuters said the deal to cut prices and reschedule orders resets the relations between the two partners and increases uncertainty about the fate of up to 400 A320 family jets. AirAsia X has unfilled orders for 70 A330neos, 10 A350-900s and 30 A321neos and a positive change in the relationship, if confirmed, would be good news.
The airline’s proposal for a 63.5-billion-ringgit ($US15.15bn) debt and equity restructuring scheme in October 2020 raised the hackles of some creditors, although others have since supported it.
Airbus said in court documents filed last December it stood to lose more than US$5billion in orders if the restructuring went ahead. Nonetheless, it backed a creditors’ meeting needed to support the scheme. The High Court of Malaysia recently gave AAX until mid-March 2022 to hold a meeting of creditors to consider a proposed debt restructuring.
