KUALA LUMPUR: The Transport Ministry and the Finance Ministry are still holding discussions with AirAsia Group Bhd, said Deputy Transport Minister Datuk Hasbi Habibollah.
However, he declined to provide details on the talks between the government and the low-cost carrier.
“I think it’s still at the discussion level, so I cannot say anything about it yet,” he told Business Times on the sidelines of the Association of Asia Pacific Airlines’ (AAPA) 70th Assembly of Presidents here.
When asked whether the talks included a financing package or government underwriting of loans, Hasbi said it is still being discussed.
“No, no, no. For that, it’s still at the discussion level,” he said.
His comments follow earlier reports over AirAsia’s financial position amid rising jet fuel prices and the airline’s efforts to raise fresh funding.
On Oct 19, the Finance Ministry said in a written parliamentary reply that the government had not made any agreement or commitment to provide financial assistance to AirAsia, whether through guarantees, loans or injections of public funds.
The ministry said any request for government support would be assessed based on national and public interests, the government’s fiscal sustainability and the protection of public funds.
Former Transport Minister Anthony Loke had also told Parliament on Oct 27 that no decision had been made on providing financial support to AirAsia with the matter still under review by the Finance Ministry.
AirAsia co-founder and adviser Tan Sri Tony Fernandes had previously denied that the airline is seeking a government bailout, saying its liquidity position remained strong despite higher operating costs.
“We do not need a rescue, bailout or whatever,” he said during a media briefing on Sept 18, adding that the airline had liquidity of more than RM1 billion.
Fernandes then confirmed with Reuters that he had met officials from the Finance and Transport ministries, but said the discussions focused on aviation-related costs, including airport charges and fuel, rather than financial assistance.
“There have been no discussions on financial assistance with the government,” he was quoted by Reuters.
In a statement on Sept 2, AirAsia Group Bhd said it planned to raise up to RM4.74 billion to refinance existing debt and strengthen its balance sheet.
The fundraising comprises up to RM4.04 billion (US$1 billion) from international debt markets and RM700 million in local credit facilities.
The group said the exercise was mainly aimed at replacing higher-cost debt incurred during the Covid-19 pandemic with longer-term financing on better terms rather than funding operational shortfalls.