AirAsia X that last week was seeking debtors to accept a 99.7% waiver has now decided to shut its shop in Indonesia and liquidate the business.
AirAsia decided to close the shop in Japan the other week and has written down the value of its AirAsia X Thailand to zero.
Here’s an excerpt from the Bloomberg:
AirAsia X Bhd. is liquidating its Indonesian arm in a bid to survive the virus pandemic that has left the low-cost airline’s planes grounded since late March.
The long-haul arm of AirAsia Group Bhd. has also written down its 49% stake in Thai AirAsia X, the airline’s deputy chairman Lim Kian Onn said in an interview with the Star newspaper.
These efforts come amid AirAsia X’s proposed restructuring plan to wipe out almost 63.5 billion ringgit ($15.3 billion) in debt and save it from collapse. The proposal requires approval from investors and creditors.
Many of the short-haul regional AirAsia operations such as Thailand, Indonesia, and the Philippines are loosely affiliated and partly owned by the Kuala Lumpur-based airline.
It is interesting to see if AirAsia and its subsidiaries have equity investors lined up who are willing to pour in cash to keep the airline flying and restart medium-haul operations sometime in 2021.
The airline was not profitable even during the best of times, and the outlook in the short/medium-term is not rosy.