AIRASIA Japan, a unit of Malaysia-based AirAsia Group (33% stake), which shut down its operations October 5, filed for bankruptcy on November 17.
The airline, in a filing with Bursa Malaysia (stock exchange of Malaysia), said it was “due to insolvency resulting from a demand slump in travel induced by lockdown restrictions related to the coronavirus pandemic.”
Meanwhile, media reports said the group may be reviewing its investment in AirAsia India and could exit the country. The airline is a joint venture with Tata Sons holding 51% stake and AirAsia Investment Limited the remaining 49%. Sources quoted by the Times of India said Tata Sons’ parent is in discussions to buy the Malaysian group’s stake.
AirAsia acknowledged in a statement that its operations in Japan and India have been draining cash, “causing the group much financial stress.” According to a report in Nikkei Asia, AirAsia Japan reported a net loss of about 4.7 billion yen on revenue of about 4 billion yen for 2019.
Commenting on these developments, AirAsia Group president (airlines) Bo Lingam said: “Cost containment and reducing cash burns remain key priorities evident by the closure of AirAsia Japan and an ongoing review of our investment in AirAsia India.”
Despite these setbacks the group remains “confident of returning stronger, more robust and faster than many competitors in this new world of travel.”
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