KUALA LUMPUR (Oct 27): The government has yet to decide whether to provide financial support to financially-distressed AirAsia Group Bhd (KL:AAGB), Transport Minister Anthony Loke Siew Fook said.
Any assistance for airlines, including foreign and private operators, would need to be studied, with the matter still being reviewed by the Ministry of Finance, he told the Dewan Rakyat while winding up the Budget 2027 debate on Tuesday.
“No decision has been made so far,” Loke said.
He was responding to Khairil Nizam Khirudin (PN-Jerantut) who raised concerns about the low-cost carrier’s high debt and asked whether the Transport Ministry is considering assistance for the airline, given its 26,000 employees and the potential impact on employment.
Tan Sri Tony Fernandes, founder and adviser of AirAsia, stressed in September that the company’s operation is sustainable with over RM1 billion cash in dismissing concerns about the airline's finances. He also said the firm did not request for a government bailout.
On Tuesday, Loke said the government is aware of AirAsia’s financial difficulties and is closely monitoring the situation. The government’s priority is to maintain air connectivity, he said, warning that the bankruptcy or closure of a major airline could also adversely affect the nation’s economy.
“If an airline shuts down, it is not just the loss of jobs for its crew,” Loke said. “The bigger issue is the impact on connectivity.”
AirAsia is now seeking fresh funding to counter headwinds from rising jet fuel prices and foreign exchange losses.
The Edge Malaysia weekly reported on Oct 1, citing sources, that the fundraising effort was backed by the Ministry of Finance. The ministry was said to be helping Alton Aviation Consultancy, which is advising AirAsia on raising up to US$1 billion (RM4.1 billion), to attract lenders and investors.
RTS Link
Loke also said fares for the Johor Bahru-Singapore Rapid Transit System Link would be set at an affordable level and would not cost more than travelling by private transport, particularly motorcycles.
The project is a bilateral initiative between Malaysia and Singapore, meaning decisions on fares could not be made unilaterally, he noted.
“Fares and other related matters must be determined jointly by the operating company, which is jointly owned by both countries,” he said. “The principle is that the governments will not provide subsidies to the company, so it has to break even.”
Singapore’s planned increase in vehicle entry permit charges for motorcycles could also encourage commuters to use the link, Loke added.
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