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Malaysia low cost airline AirAsia Group Bhd. He’s reviewing the investment in his cash-hungry Indian subsidiary, hours after his Japanese unit went bankrupt.
“Our business in Japan and India have been running out of cash, causing the Group a lot of financial stress,” said Bo Lingam, president of airlines at AirAsia Group, in a statement on your website. “Cost containment and reducing cash burn remain obvious key priorities for closing from AirAsia Japan and an ongoing review of our investment in AirAsia India. “
AirAsia Japan Co. filed for bankruptcy with the Tokyo District Court early Tuesday, after noting last month that it would. ceasing operations in the country as the coronavirus pandemic that wiped out travel around the world took its toll. Airasia Japan received an interim administration order from the court on Tuesday, it said in a statement.
The group also stopped financing AirAsia India Ltd., Bloomberg News reported last month, leaving the future of the company largely dependent on its 51% shareholder, the Indian conglomerate. Tata Group. Long Distance Economy Arm, AirAsia X Bhd., Not doing much better, earlier this month sending a new proposal for restructuring debt to creditors.
Representatives for Tata and AirAsia India declined to comment.
AirAsia, which reported its biggest loss on record in the second quarter ended June 30, has been under immense pressure this year as Covid-19 shakes up the aviation industry. Airlines around the world have been plunged into a crisis, many of which have cut thousands of jobs and tried to raise funds to survive. Some, pushed to the edge of the abyss, have closed.
AirAsia Japan had already canceled all flights, including one between Nagoya and Taipei. Services operated to Japan by other AirAsia airlines in places like Thailand and the Philippines will not be affected. International services to Japan from Malaysia, Thailand and the Philippines will resume as travel restrictions are eased and borders are reopened, the airline said Tuesday.
“Given AirAsia Japan’s current financial situation, we regret to inform you that AirAsia Japan is unable to settle outstanding repayments,” according to another statement. “We sincerely apologize for any inconvenience caused to customers who have used or booked AirAsia Japan flights.”
Customers who have booked AirAsia Japan flights can request a refund, which should be available from April next year, or they will receive a credit that can be used on any other AirAsia-operated flight.
AirAsia India predicted it would break even in four months when it started flying in 2014. In reality, it has yet to make money in a market where high fuel taxes and fierce tariffs can make even dominant players unprofitable. . The airline has a 6% market share and employs more than 3,000 people.
(Updates with AirAsia India’s refusal to comment on the fifth paragraph)
