Airasia S Pandemic Recovery To Take 2 More Years Says Fernandes

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AirAsia has raised RM336 million via private placement in the first quarter of 2021, according to Tony Fernandes. (Bernama pic)KUALA LUMPUR: AirAsia Group CEO Tony Fernandes said Thursday that a financial recovery is two years away as rising Covid-19 cases in major operating countries force prolonged border closures and travel restrictions.
Fernandes, the budget carrier’s co-founder, spoke as the airline reported a revenue decline of 87% in the first quarter ended March 31 to RM298.22 million from RM2.31 billion posted in the same period last year.
AirAsia also recorded a net loss of RM767.42 million, slightly better than the RM803.85 million in red ink registered in the first quarter of 2020.
The group had racked up its worst-ever annual earnings for the full year 2020 as a result of domestic and international border closures to contain the spread of the Covid-19 pandemic, which has ravaged global travel and airline industries.
In a statement, Fernandes said the carrier is optimistic a recovery is achievable in two years given immunisation efforts in major Southeast Asian economies, better testing capabilities, expected global digital health passports and more travel bubbles within the region.
“In most of our operating markets, vaccinations are in progress and the majority will have had at least 50% of their population receiving at least one dose by the end of 2021,” Fernandes said, adding that he recently received his first shot.
“This is expected to deliver a huge boost for air travel demand for our key Asean markets, on top of strong pent-up demand,” he said.
Despite the pandemic-induced slowdown, Fernandes said AirAsia is eager to increase market share in Indonesia and the Philippines – as it has stand-alone operations in both countries.
He also said that AirAsia has raised RM336 million via private placement in the first quarter of 2021, with approval letters from banks that have been obtained for financing under a government programme operated by Danajamin Nasional Bhd, Malaysia’s sole financial guarantee insurer.
“Our aim is to raise RM1 billion under the Danajamin scheme in Malaysia, as well as to raise new capital in Indonesia and the Philippines,” he said.
In the same statement, AirAsia Group president (Airlines) Bo Lingam said the carrier experienced a recovery in travel in Indonesia during the first quarter, but demand continues to be weak in Thailand, Malaysia and the Philippines, which are all grappling with a fourth wave of coronavirus infections.
“AirAsia Indonesia is demonstrating strong signs of recovery as the entity operated close to 70% of pre-Covid domestic capacity in the first quarter of 2021,” Bo said.
“We expect domestic operations in Malaysia and the Philippines will be below 25% of pre-Covid levels, until at least September 2021, while more of the population are receiving their vaccinations,” he added. - FMT

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