‘We do not need rescue’: AirAsia's Fernandes denies reports on Malaysian government seeking rivals’ help

AIRASIA co-founder Tony Fernandes said reports that Malaysia’s government has asked rivals for help were false, adding that the low-cost airline will emerge from its current crisis stronger than before. 

At a press conference in Bangkok on Friday (Sep 18), Fernandes said reports the government had sounded out Malaysia Airlines and Batik Air about absorbing AirAsia’s domestic market share was the “most ludicrous statement” he has heard in his 25 years at the airline. 

AirAsia controls about 60 per cent of Malaysia’s domestic market.

The reports, citing sources, said the move was part of what was described as scenario planning, as authorities monitor the financial health of South-east Asia’s largest low-cost carrier.

This comes as a spike in jet fuel prices stemming from the Iran war has affected airlines globally, contributing to the collapse of debt-laden US carrier Spirit Airlines in May and a Chapter 11 bankruptcy filing by Latvia’s airBaltic on Monday.

“I can say confidently the government said we never said anything like that,” Fernandes said. “You cannot just say, ‘Oh, this airline is going to take AirAsia’s capacity’.”  

He added that “no one can replace” AirAsia’s 100 planes in the country overnight. “You have to have our cost structure, our brand, our market, our network,” he said.

“We do not need rescue”

Fernandes hit back at critics of the airline’s financial strength, saying the carrier has not requested a government bailout, has no plans to sack workers, has the support of its creditors and is slowly adding back capacity it cut earlier. 

“We’ve never received any government support in the last 25 years. And as of today, we haven’t got any and that’s it,” Fernandes said on Friday.

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He added that there had been no discussions with the government and “we do not need rescue, bailout, whatever”.

AirAsia’s woes have mounted in 2026 as the Iran war sent oil and jet fuel prices surging. The carrier’s fuel costs surged 66 per cent in the second quarter from the prior quarter to an average of US$183 ​a barrel, and it has no hedging in place.

Its stock has plunged around 75 per cent since the conflict started, with the slide accelerating this week on growing concern over its financial position. Since the report on Wednesday, AirAsia’s shares have fallen about 24 per cent, hitting the lowest level since December 2022.

AirAsia has also taken the unusual step of selling six newly-delivered planes since the start of 2025, including two in July, Bloomberg News reported earlier on Friday.

The carrier, which in August reported its largest quarterly loss in four years, is also seeking to amend terms of a US$200 million private credit loan, Bloomberg reported earlier this week.

Covid “far, far worse” than current crisis

Despite AirAsia’s woes, Fernandes dismissed concerns about its future. 

“We’ve been through many many crises, but we’ve always come out stronger,” he said.

“Covid was far, far worse than what we are dealing with now. We couldn’t fly then, but we can fly now and our demand is very strong.” 

While the second quarter marked the toughest period for the airline, Fernandes forecast improving conditions as AirAsia adjusts fares to reflect higher fuel costs.

He also lashed out at the media, saying coverage of the airline is overblown.

Fernandes cites “strong liquidity”

“We are good at managing cash”, he said, adding that the low-cost carrier had “strong liquidity” to weather soaring jet fuel costs as he sought to ease investor concerns about the airline’s financial health.

AirAsia had 954 million ringgit (US$233 million) in cash and equivalents as at the end of June – one of the lowest balances among airlines tracked by Bloomberg globally – against current liabilities of 18.4 billion ringgit.

Malaysia’s finance ministry has hired Alton Aviation Consultancy to assess AirAsia’s funding needs as it weighs what support, if any, it could extend to the airline given its importance to the local economy, Reuters reported in September.

Fernandes said AirAsia expected to raise more than US$1 billion, mostly to refinance existing debt, by December or January.

AirAsia said in September ​it was advancing discussions with financial institutions, ⁠targeting up to US$1 billion from international debt markets plus 700 million ringgit in local credit facilities, primarily to restructure its debt.

“The refinancing is...not raising fresh capital. It’s about bringing down costs,” Fernandes said.

He said AirAsia was in talks with a major global bank on a bond transaction and the airline had also received an offer from a Middle Eastern investor for US$1 billion in funding with a term sheet signed pending due diligence, but it was holding out for better terms.

The group’s load factor, which measures how well an airline is filling available seats, stood at 80 per cent in the third quarter and it sees strong bookings for the fourth quarter, Fernandes said, adding he was optimistic about operations in Indonesia, the Philippines and Thailand.

The carrier has been restructuring aggressively, cutting underperforming routes, ​returning 25 older aircraft to lessors and renegotiating contracts with vendors to reduce costs.

Fernandes said no planes had been repossessed or their returns forced by lessors.

AirAsia is also accelerating its A321LR and XLR strategy to phase out fuel-inefficient A330s, and Fernandes said the airline expects “a pretty exciting announcement” with Airbus within the next month regarding its growth and strategy. BLOOMBERG, REUTERS