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flee

Saving Airasia Group and Airasia X: Covid-19 Recovery Thread

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This is now becoming a story on its own. This is to track the stories relating to the survival challenges that Airasia Group and Airasia X are facing after the Covid-19 pandemic destroyed much of the aviation and travel related industries of the world!

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 AirAsia Studies Fundraising, Joint Ventures Amid Virus Squeeze

AirAsia Group Bhd. is evaluating capital-raising proposals from bankers and looking at potential partnerships as it tries to ease liquidity pressure that’s also having knock-on effects on aircraft lessor Fly Leasing Ltd.

The Malaysian budget carrier is in talks with “a number of parties” about joint ventures and collaboration that may lead to additional investment, it said in a statement. SK Group is reviewing a proposal to buy a small stake in the airline, though no decision has been made yet, a spokesman at South Korea’s third-biggest conglomerate said, without providing further details.

Last month, people familiar with the matter said AirAsia sent a memo to Malaysian banks as it sought to borrow 1 billion ringgit ($235 million) to help fund its operations. The carrier, which has posted losses for three of the past five quarters, is due to report first-quarter results later this month.

https://www.bloomberg.com/news/articles/2020-06-05/airasia-studies-fundraising-joint-ventures-amid-virus-squeeze

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AirAsia boss Fernandes hopeful regional countries will reopen their borders from July

KUALA LUMPUR (June 14): AirAsia Group Bhd founder Tan Sri Tony Fernandes is hopeful that countries in the region will start reopening their borders for international travel from July, starting with Singapore, Thailand, Indo-China and perhaps South Korea, Japan and China.

"It has been a tough three months. I think airlines have probably been one of the companies that suffered the most. We have not had any revenue for three months. We're now getting some sales [but] when you have 300 airplanes sitting on the ground... it has been very tough," Fernandes said in a video post he put up on Instagram yesterday.

More: https://www.theedgemarkets.com/article/airasia-boss-fernandes-hopeful-regional-countries-will-reopen-their-borders-july

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3 hours ago, KK Lee said:

If tf could convience #ddtg to pump ak stock, the story would be different.

It would be interesting to see what they will do to overcome this, and if they would succeed or fail. The highly paid directors have to now prove their worth to the company.

Edited by flee

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The Board of Directors of AAGB wishes to advise that the Company has been presented with proposals for it to raise capital to strengthen its equity base and/or liquidity from a number of investment bankers, lenders as well as potential investors to help the Company weather the storm caused by the Covid-19 pandemic. In addition, the Company has ongoing deliberations with a number of parties for joint-ventures and collaborations that may result in additional investments in specific segments of the group's business.

 

AAGB is currently evaluating these proposals and may soon reach a decision as to the final form (which may be a combination thereof) as well as the amount to be raised. Any decision made will take into account the Company's business needs and the interests of the Company, its shareholders and other stakeholders. The Company is unable to divulge any information at this stage so as not to jeopardise any of the proposals due to the confidential nature of the discussions with the various parties. However, the Company will ensure to make the necessary follow-up announcements as and when appropriate as well as seek the various approvals (if required) in order to undertake such fund raising exercise.

 

This announcement is dated 4 June 2020.

 

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If the regional countries do not open by end of July, AirAsia Group will initiate second round of layoff. First round they let off around 400 staff and more are in the pipeline. After this COVID19 drama, I hope AAGB/TF will start saving money for any future downturn and keep some high-demand assets rather than really being asset-light company. Well, one may say COVID19 is unprecedented, the piggy money could have mitigate the layoff to minimal amount or future loss. Build an airline with good reputation, prudent spending and Class A stock like Singapore Airlines, and when time comes, you can get funding easier with bank, financial institution and lenders. SQ Group raised USD 15 billion for mitigating COVID19 impact, that shows how well managed and well regarded the Group is in the financial market.

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15 hours ago, JuliusWong said:

If the regional countries do not open by end of July, AirAsia Group will initiate second round of layoff. First round they let off around 400 staff and more are in the pipeline. After this COVID19 drama, I hope AAGB/TF will start saving money for any future downturn and keep some high-demand assets rather than really being asset-light company. Well, one may say COVID19 is unprecedented, the piggy money could have mitigate the layoff to minimal amount or future loss. Build an airline with good reputation, prudent spending and Class A stock like Singapore Airlines, and when time comes, you can get funding easier with bank, financial institution and lenders. SQ Group raised USD 15 billion for mitigating COVID19 impact, that shows how well managed and well regarded the Group is in the financial market.

SQ is a glc, on a mission for sg, have over horizon vision (i.e >10 years), quarterly reports although is important but not critical. AK's existence is to maximize returns to controlling shareholders, is a different breed, is unlikely to change post covid19.

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On 6/20/2020 at 7:55 PM, JuliusWong said:

If the regional countries do not open by end of July, AirAsia Group will initiate second round of layoff. First round they let off around 400 staff and more are in the pipeline. After this COVID19 drama, I hope AAGB/TF will start saving money for any future downturn and keep some high-demand assets rather than really being asset-light company. Well, one may say COVID19 is unprecedented, the piggy money could have mitigate the layoff to minimal amount or future loss. Build an airline with good reputation, prudent spending and Class A stock like Singapore Airlines, and when time comes, you can get funding easier with bank, financial institution and lenders. SQ Group raised USD 15 billion for mitigating COVID19 impact, that shows how well managed and well regarded the Group is in the financial market.

I think TF and KM paid to much attention to analysts - they are not happy with the share price in Bursa as they believed that the company is undervalued. So they tried to "please" analysts by taking their advice on capex and expenditure items.

On capex, they decided to reduce the company's gearing by selling of AAC assets and leasing them back. That was how they ended being asset light and the balance sheet showing low debt (and therefore gearing).

They also listened to analysts about fuel hedging. This is now a big headache for them as they will definitely lose money on the hedging contracts this year.

They had hoped that by pleasing the analysts, the market will value the shares higher. But they forget that Airasia Group is really a private company owned largely by its founders. So the risks of share ownership will be higher and that is probably one of the reasons they marked down the price.

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On 6/21/2020 at 11:40 AM, KK Lee said:

SQ is a glc, on a mission for sg, have over horizon vision (i.e >10 years), quarterly reports although is important but not critical. AK's existence is to maximize returns to controlling shareholders, is a different breed, is unlikely to change post covid19.

Don't think it matters if it is a GLC or private owned company, it is up to the management to run their business with financial prudent and cost conscious or spend a tonne of money on Black Eyes Peas for year end concert. AirAsia Group of airlines share has always been measly any way, those who think they can make big bucks buying AK/D7 shares, I have a bridge to sell to you.

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