AirAsia predicts strong recovery next year as cash-strapped airline raises $ 233 million through rights issue

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AirAsia Group, controlled by Malaysian tycoons Tony Fernandes and Kamarudin Meranun, expects air travel to Southeast Asia to pick up sharply next year as the cash-strapped carrier raises $ 974.5 million. ringgits ($ 233 million) through a rights issue.

Supported by Fernandes, Kamarudin and other existing shareholders, the fundraising exercise will end tomorrow with the listing of Islamic Redeemable Unsecured Debt Securities (RCUIDS) with a maturity of seven years and warrants. AirAsia said in a statement on Wednesday. The RCUIDs, with a nominal value of 0.75 ringgit each, are accompanied by free and detachable warrants, allocated on the basis of two RCUIDs with one coupon for six AirAsia shares held.

“The issue of rights is a key part of our overall fundraising strategy supporting a strong rebound in air travel in Asean in 2022,” said Fernandes, CEO of AirAsia Group. “We are gradually resuming flights to all of our key markets and look forward to returning to pre-Covid levels on many of our popular routes in the new year, along with high vaccination rates, better testing procedures and education in all our markets. ”

With the proceeds from the rights offering and the guaranteed loan of Ringgit 500 million from Malaysian state-owned company Danajamin Nasional Bhd, AirAsia has now raised Ringgit 2.5 billion in new capital. The funding will provide strong liquidity for the airline to speed up operations until next year, Fernandes said.

“After the most difficult two years in commercial aviation history, the end is finally at hand,” said Fernandes. “We survived the pandemic. We have restructured, relaunched and are now in a better position to recover faster. “

Airlines have been among the hardest hit by the pandemic, as governments around the world have imposed closures and restricted cross-border travel to curb the spread of the virus over the past two years. Airlines around the world will lose about $ 52 billion this year after suffering around $ 138 billion in losses last year, according to estimates by the International Air Transport Association.

“We have used flight downtime to review all aspects of our flight operations with a strict focus on cost containment and the implementation of an optimal network and fleet strategy to build a platform. -solid shape to return to the sky lighter and stronger than ever. key markets, ”Fernandes said. “We have also evolved into a digital travel and lifestyle services group that is not solely dependent on airfare, delivering a more robust and resilient model for the future. “

Last month, AirAsia launched a parcel delivery service to harness the e-commerce boom in Southeast Asia. The new company complements the airline’s food delivery and rideshare services, which are part of initiatives to build a superapplication that will compete with Southeast Asian tech titans such as Indonesia’s GoTo and Grab and Sea Group. from Singapore.

Fernandes and Kamarudin took over AirAsia in 2001 to create a low cost carrier that would make air travel affordable. The partners have dropped this year’s ranking of Malaysia’s 50 richest people.


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