AirAsia X has hit out at critics in a strongly-worded statement, after creditors to the long-haul, low-cost carrier overwhelmingly approved a debt restructuring plan. The carrier’s 12 November statement, desrcribed the restructuring as a “wide and deep reset,” and is a necessary one in order for it to rebuild its business.
In comparison to restructurings completed by other aviation companies recently, the company’s own restructuring “is all encompassing, comprehensive and covers all creditors without being restricted to a particular class or groups of creditors”. Upon completion of the restructuring exercise, AirAsia X will be “one of the very few airlines worldwide” which has no gearing, and a restructured cost base significantly lower than competitors in Asia-Pacific, it says.
It goes on to state the restructuring proposal, made to creditors in October, was initially “comprehensively rejected and widely derided” by several parties as “wholly inadequate and unreasonable”. However, the creditors have since agreed to proceed with the proposal intact, and without any substantial changes to what was first presented after “many transparent discussions” on its business plans and an “alignment of common business interests”.
Through three disclosures made by AirAsia X on 12 November to Bursa Malaysia, all three classes of creditors voted in favour of the restructuring. Following the vote, the results will then be presented for court sanction, before implementing the restructuring plan. It also expects the process to be completed in the first quarter of 2022.
In response to critics who have advocated for the carrier to be dissolved, the carrier says: “Several local aviation pundits have continued aggressively to advocate a liquidation of [AirAsia X] arguing without basis that the airline is moribund, terminally ill and with no valid reason not to be liquidated”.
“[AirAsia X] welcomes a dialogue with these experts and to be given an opportunity to update them on developments in a rapidly changing global aviation business and to provide them a better understanding of Malaysian restructuring laws for a more informed appreciation of how and why the restructuring scheme was framed in the manner and structure it was,” it adds.
The carrier, which now operates four Airbus A330-300s on regional cargo flights, is expecting to increase the fleet to six A330s by year end. Having started operating dedicated belly cargo flights for major freight companies, it is discussing with these companies on belly cargo agreements to be operated on combined passenger-cargo flights once national borders reopen.
Meanwhile, Reuters reported on 12 November that as part of the restructuring, AirAsia X’s order made in August 2019 for up to 78 A330neos and 30 A321XLRs will now shrink to 15 A330neos and 20 A321XLRs. An Airbus spokesperson quoted in the Reuters report confirmed the change.
AirAsia X shareholder Tony Fernandes welcomes vote
“Overwhelmed by this strong vote of confidence from our creditors, including our guests who have faith in the future of [AirAsia X]. As a long haul, international-only airline, [AirAsia X] was at the sharp end of Covid, but this milestone paves the way for it to resume operations in the coming months when international borders reopen,” says Fernandes.
He expressed reassurance that affected travellers “will be taken care of,” where travel credits for future flight ticket purchases will be made available after restructuring, once AirAsia X resumes operations.
“Congrats again [AirAsia X]. Look forward to seeing our big birds flying once again soon and making more dreams come true,” says Fernandes.