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AirAsia Group receives approval for US$119.6 million loan
October 6th 2021
AirAsia Group says approval from financial guarantee insurer Danajamin Nasional for an 80% guaranteed loan of up to RM500 million (US$119.6m) signals strong support for its recovery plans. Read More » The loan is being made available under the Danajamin Prihatin Guarantee Scheme, which is part of Malaysia’s economic stimulus package in response to COVID-19. On Tuesday, the company revealed the loan was approved by its lenders under club deal term financing with the 80% guarantee to be provided for the facility by Danajamin via Syarikat Jaminan Pembiayaan Perniagaan, a wholly-owned entity of the Malaysian Ministry of Finance. It said the finance was earmarked as working capital to support staff costs and key operating expenses such as aircraft maintenance as the airline group prepared to ramp up operations in anticipation of borders reopening. AirAsia executive chairman, Kamarudin Meranun, said: “countries around the world, including those in the region have begun to reopen international borders amid promising progress in vaccination rates. Malaysia’s adult vaccination rate is close to 90% and domestic interstate movements will be allowed once we reach that milestone. “The Langkawi travel bubble has been a huge success with overwhelming demand since we launched up to 90 services a week from September 16.
“In Thailand, Indonesia and the Philippines, we are seeing pleasing progress as services have gradually started to resume. As countries in the region continue to discuss and implement travel bubbles and gradually reopen international borders, we are confident we will be able to recover and rebound strongly in the near future."
The loan approval came as the group converted 13 undelivered A320 aircraft to A321neos under an amended agreement with Airbus. AirAsia now has a total order of 362 A321neos with deliveries stretching up to 2035. It has been flying the fuel-efficient planes since late 2019 and has four in service, along with 38 A320 neos, in a total fleet of 211 aircraft. The A321neos can seat up to 236 passengers in a single-class and are equipped with Airbus's Space-Flex cabin for more efficient configuration. AirAsia Group president Bo Lingam said the aircraft type would give AirAsia significant operation efficiencies, with more than 10% fuel savings, an additional 50 seats and more cargo space. "The A321neos will eventually replace the older A320s, which will lead to significant sustainability benefits where the fuel savings translate into some 5,000 tonnes less carbon dioxide emissions per aircraft per year, in addition to the double-digit reduction in nitrogen oxide emissions and reduced engine noise," he said.
