The tides are turning for AirAsia X as they announced on July 20 that they’ve submitted an application to Bursa Malaysia, Malaysia’s stock exchange, to be released from its financially distressed category, Practice Note 17 (PN17). The airline, owned by Capital A, made this request after demonstrating improved financial health by posting three consecutive quarters of net profit and turning its shareholders’ equity positive.
AirAsia X also requested relief from the requirement of submitting a regularization plan. The plan, which was due by July 28, was an expectation set by the Malaysian stock exchange for all companies designated as PN17.
Road to Financial Stability
The financially distressed status of PN17 was given to AirAsia X by the Malaysian stock exchange in November 2021, following the Covid pandemic’s impact. The label, given to companies experiencing financial distress, comes with a stipulation of providing a financial regularization plan within a year or risk being delisted. In December 2022, Capital A requested extensions to this deadline. But now, with the rebound in travel demand in Asia, the airline’s financial conditions have improved.
The airline explained that they’ve taken numerous measures and corporate exercises to better their financial standing. This includes debt restructuring, a 99.9% share capital reduction, share consolidation, and the revision of their business plan. Their new business plan features a leaner and more viable cost structure, focusing primarily on medium-haul flight operations. It also includes a network plan, which resulted in the termination of unprofitable routes.
An Optimistic Outlook
AirAsia X’s CEO, Benyamin Ismail, expressed positivity in a press release, saying, “We have managed to maximize the recovery of all of our revenue segments even though some of our fleet remains on the ground.” He noted that as of March 31, 2023, the airline had a healthy cash position of MYR192.37 million ringgits (USD42.1 million) with no outstanding debts and enough working capital for the next 12 months.
Recently, the company increased its equity position by raising MYR50 million (USD10.9 million) through selling shares to investors like AHAM Asset Management, AIIMAN Asset Management, and Lavin Group.
According to aviation data sources, AirAsia X currently operates fifteen A330-300s, with eleven of them active. They cover 17 scheduled routes across Asia and Australasia. They also have orders for fifteen A330neos and twenty A321xlrs.
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