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Shareholders give AirAsia X green light for restructure
November 15th 2021
AirAsia X (AAX) shareholders have overwhelmingly endorsed the company’s debt restructuring, but Malaysian authorities have warned the budget carrier it needs to reimburse travelers for tickets purchased. Read More » About 99% of creditors across the company’s three share classes voted in favour of the restructuring that AAX said would be presented for court endorsement in the coming weeks. The restructuring will see creditors receive just 0.5% of the debt owed, allow the airline to end existing contracts and also continue to renegotiate its deal with Airbus from 108 aircraft to 15 A330neos and 20 A321XLRs. AAX expects the restructuring to be completed in the first quarter of 2022 after which it will be “well poised to compete very effectively”, it said. The LCC group operates four A330s for regional cargo flights and said another two would be operational by year-end. An aggressive process of cost containment and a seeking of alternative sources of revenue such as cargo operations had reduced its monthly cash burn to about US$800,000, AAX said. It also had begun operating belly cargo flights for several global freight companies with ongoing discussions for combination passenger-cargo flights when borders reopen. AAX chairman, Rafidah Aziz, said the sacrifices made by staff were critical components in containing costs. “We would like to thank all our furloughed pilots, crew and support staff and assure all of them they will be brought back to full employment in the coming months as borders open up,” he said. “AAX wishes to reiterate business partners and supporters, particularly passengers, are vital and important to AAX and that it values this relationship.” However, the Malaysian Aviation Commission (MAVCOM) has told AAX to reassess any proposal to treat passengers as creditors and only repay them 0.5% of the value of tickets purchased. “MAVCOM takes the view air travel consumers ought not to be classified as “creditors” as the air travel consumers did not, inter alia, sell any products, provide services or make loans to AAX but instead have paid monies for the purchase of tickets in advance of their flights,’’ the regulator said in a statement. “Accordingly, MAVCOM reiterates its position that AAX should reimburse air travel consumers for the tickets purchased. If AAX fails to reimburse the affected air travel consumers accordingly, MAVCOM will not hesitate to exercise its powers under the Malaysian Aviation Commission Act 2015 [Act 771].” AAX co-founder and director, Tony Fernandes, said it was the company’s firm intention to provide passengers with travel credits that could be used to buy flight tickets when borders reopened.
