Malaysian regulators permitting Air Asia X to trade while insolvent, while it threatens passengers demanding refunds ; meanwhile Tony Fernandes seeks intervention of Malaysia's King Abdullah to "reset" his and AAX's fortunes

 by Ganesh Sahathevan

                                           The "national reset"

Air Asia X has been trading while insolvent since at least last October(see story below. Malaysian regulators ought to have stopped it from doing so, but have instead chosen to look the other way, even as the company threatens passengers seeking refunds. The Vibes, quoting Deputy Chairman Lim Kian Onn reported: 

.... it is in the best interest of our passengers to allow us to fly again so that we are in a position to honour their travel credits with us.

“Put simply, the alternative is that everyone loses without any chance of recovery of what is owed if we are not successful in this restructuring.” 

The company is seeking court orders  to avoid paying creditors, but in order to do so the courts will have to ignore serious regulatory issues, including findings by the UK Serious Fraud Office.

Meanwhile AAX's major shareholder and its effective chief  executive Tony Fernandes has joined with a number  of others in a petition to Malaysia's King Abdullah, asking the monarch to hand them powers to "reset" the economy.  It is hard to see how that "reset" will not be to the detriment of AAX's passengers.

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Tuesday, October 20, 2020

“We have run out of money": AAX Deputy Chairman Lim Kian Onn has admitted that AAX has no money- Investigation into when AAX began trading while insolvent required as a matter of urgency, immediately after receivers are appointed

 by Ganesh Sahathevan

The following reported by Travel Daily and others, quoting Air Asia X Deputy Chairman Lim Kian Onn: 

“We have run out of money. Obviously, banks will not finance the company without shareholders, both old and new, putting in fresh equity. So, a prerequisite is fresh equity,” Lim said. He added the airline had actual liabilities of MYR 2 billion (USD 0.48 billion), with the larger figure of MYR 63.5 billion (USD 15.31 billion) including all lease payments for the next eight to 10 years and its large order for Airbus SE planes and contracted engine maintenance with Rolls-Royce Holdings.

“If we find MYR 300 million (USD 72.32 million) in new equity, then the shareholder funds are MYR 300 million (USD 72.32 million) at the restart of business and if we are able to borrow MYR 200 million (USD 48.21 million), we feel that we will have a good platform to start all over again,” he told The Star newspaper. Lim said AirAsia X also needed to convince its lessors of its business plan, adding an unnamed lessor recently took back one of the airline’s planes to convert it to a freighter.

Lim's statements should be read with AAX's email sent to customers recently, where refunds were refused on the basis on an imagined court order. AAX belongs in the hands of receivers, and current management need to be investigated for trading while insolvent. 

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Tony Tajuddin Fernandes claims he needs court approval to refund tickets for Air Asia X cancelled flights: SC , consumer regulators, creditors should formalise the court process that Fernandes imagines, and seek court orders to appoint receivers ASAP

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