Malaysia weighs AirAsia support while seeking to protect public funds
Former transport minister Anthony Loke says the Finance Ministry is reviewing options, with any conditions to be decided by Prime Minister Datuk Seri Anwar Ibrahim.
Malaysia is considering financial support for AirAsia but would require a regulated arrangement rather than an unconditional cash injection, former transport minister Anthony Loke told Reuters. He said the Finance Ministry was assessing options while seeking to safeguard public money and preserve air connectivity.
Loke, citing Cabinet discussions, said responsibility for the review lay with the Finance Ministry rather than the Transport Ministry. He did not disclose the options, saying Prime Minister Datuk Seri Anwar Ibrahim, who also holds the finance portfolio, would determine any conditions.
AirAsia accounts for about 60% of Malaysia's domestic aviation market and recorded RM18.4 billion in current liabilities as of June 30. Neither the airline nor the Finance Ministry responded to requests for comment.
The airline has said it is seeking up to US$1 billion (RM4.08 billion) through international debt markets, alongside RM700 million in local credit facilities. Co-founder Tan Sri Tony Fernandes told Reuters he expected completion of the US$1 billion fundraising between December and February.
Fernandes denied seeking government financial assistance but said the airline would accept help if offered. The Finance Ministry had previously said it had neither agreed nor committed to guarantees, loans or injections of public funds for AirAsia.
Separately, Tengku Datuk Seri Zafrul Abdul Aziz, an adviser to Anwar and chairman of the Malaysian Investment Development Authority, said support for private companies should safeguard businesses and employees rather than shareholders. Responding to questions about AirAsia, he stressed that these were personal views on government intervention generally.
Loke also cited limited relief already provided to airlines. From May 1, the Civil Aviation Authority of Malaysia lengthened payment terms for aviation fees and charges to 60 days from 30 days.
