Finance Ministry Denies Approving RM1 Billion Government Loan to AirAsia

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The Finance Ministry (MoF) today dismisses a wire report stating that AirAsia Group Bhd has secured a RM1 billion loan from the government via the ministry.

“We would like to clarify that it (MoF) has not approved any government financing or guarantee to any airline,” said an MoF spokesperson.

Nikkei Asia today reported that the RM1 billion would be 80 percent-guaranteed by the MoF and disbursed by a group of local banks under the government’s RM50 billion Danajamin Prihatin Guarantee Scheme (DPGS).

The report said the disbursement was expected next month and would be used by AirAsia to repay short-term loans and for working capital.

Danajamin Nasional Bhd is the country’s first financial guarantee insurer providing the DPGS as part of the Prihatin economic stimulus package introduced by Prime Minister Tan Sri Muhyiddin Yassin.

The facility is available through all financial Institutions until December 31, 2020, or until the fund is fully utilised.

EPA

AirAsia will also reportedly be embarking on another retrenchment involving 400 employees in all divisions next month as the pandemic dragged the airline’s operations, hampering demand for air travel which was exacerbated by international borders closures.

Fernandes previously said AirAsia had reduced more than 10 percent of its 24,000 workforce.

Shafwan Zaidon

It was reported that the airline had laid off over 2,400 employees since Malaysia’s borders were closed on March 18 this year.

The last round of retrenchment involving cabin crew and pilots ended last week.

AirAsia had also planned to downsize its fleet of aircraft and is currently awaiting to return some of its aircraft to its lessors.

The airline is also in discussion with Airbus to revisit its aircraft orders involving A320 and A321 aircraft as well wide-body A330.

It was reported that Fernandes had planned to reduce AirAsia’s fleet to 180 aircraft by the end of 2021 from the current 245.