Can AirAsia and Malaysia Airlines stay aloft amid the coronavirus pandemic? Only with major restructuring, experts say
- According to the government, airlines in Malaysia are expected to take three years to recover from the impact of Covid-19
- AirAsia’s combination of lay-offs, diversification and loans is seen as a viable strategy, but analysts say the future is less clear for Malaysia Airlines
Transport Minister Wee Ka Siong this month said the Malaysian Aviation Commission’s revised projections for passenger traffic in 2020 came in at 26.6 million, plummeting more than 75 per cent from the 109.2 million passengers recorded last year.
“Airlines are expected to need a period of three years to fully recover the situation from the impact of the Covid-19 epidemic, subject to the outbreak in the country and abroad,” he said in a parliamentary response.
AirAsia’s strategy so far has been a combination of lay-offs, diversification and scrambling for loans. The low-cost carrier last month confirmed it was retrenching about 2,400 employees and seeking up to 2.5 billion ringgit (US$606 million) in funding to tide it over, including 1.5 billion ringgit in bank loans.
The airline’s long-haul arm, AirAsia X, has sought to ward off disaster through debt restructuring and cutting share capital, although its Japanese operations filed for bankruptcy last week.
