Kuala Lumpur, October 13 – AirAsia, Southeast Asia’s largest low-cost airline, is in talks with the Malaysian government over potential funding support amid financial pressures. Co-founder Tony Fernandes met finance ministry officials two weeks ago to discuss possible backing for the airline’s fundraising efforts, sources say. These talks reflect concerns about the financial health of Malaysia’s biggest domestic carrier from rising costs.
The meetings, requested by Fernandes and involving transport officials, focused on government support for capital raising if AirAsia accepted conditions under discussion, sources indicated. Fernandes stated conversations addressed aviation costs such as airport charges and fuel rather than financial assistance, affirming full confidence the airline can manage without state aid.
Jet fuel prices surged 66 percent in the second quarter to an average of US$183 a barrel, resulting in an RM831 million net loss. The low-cost carrier aims to raise about US$1 billion between December and February to refinance debt and support working capital amid elevated liabilities.
Representatives from Alton Aviation Consultancy, hired by the Ministry of Finance to assess funding requirements, attended the discussions. AirAsia holds approximately 60 percent of the domestic aviation market, though its stock has declined sharply this year. Officials have not commented as the potential funding support talks continue.