Fernandes denies funding support talks after AirAsia government meetings

Reuters cited three people as saying AirAsia co-founder Tan Sri Tony Fernandes had discussed possible state support with Finance Ministry officials. Fernandes acknowledged meetings with government officials but rejected the account that financial assistance was on the agenda.

Two of those people said government backing for the airline's fundraising depended on proposed conditions that were still being discussed. Reuters was unable to establish the details. The people attributed the discussions to government concern about AirAsia's financial position following a jump in jet fuel prices.

Fernandes, also an adviser to the airline, told Reuters he initiated meetings with officials from both the finance and transport ministries in the week starting Sept 28. He said they covered aviation costs, including fuel and airport charges. He denied requesting financial assistance or being offered support, although he said AirAsia would accept help if offered.

He also said he remained interested in government help to obtain Malaysian bank loans, favouring borrowing in local currency on better terms and interest rates. The Finance Ministry declined to comment; neither the Transport Ministry nor Alton Aviation Consultancy responded to comment requests. Two people said Alton representatives were present at the meeting.

Fernandes expects completion of the US$1 billion fundraising between December and February. He said half would replace expensive loans, while the balance would fund working capital and repay extended liabilities.

AirAsia's net loss was RM831 million for its second quarter, which ended June 30, with higher fuel costs and RM331 million of foreign-exchange losses weighing on results. Its June 30 cash and bank balances totalled RM954 million, while current liabilities amounted to RM18.4 billion.