AirAsia X (D7, Kuala Lumpur International) submitted an application to Bursa Malaysia on July 20 to exit the stock exchange’s Practice Note 17 (PN17) financially distressed category, having “managed to turn around its financial position” by posting three consecutive quarters of net profit and turning its shareholders’ equity positive, it said in separate statements.
Besides requesting the removal “from being classified as an affected listed issuer” under PN17, the Capital A-owned long-haul budget carrier also asked the exchange for “relief” from having to submit and implement a regularisation plan, which it had already asked for more time to complete and which was due by July 28.
The Malaysian stock exchange gave the Covid-struck carrier PN 17 status in November 2021, a label it applies to listed entities it considers to be in financial distress. Such companies have a year to submit a financial regularisation plan to the bourse or risk delisting, but in December 2022 Capital A asked for the first of a series of extensions to this deadline. Its financial condition has now improved as demand for travel in Asia rebounds.
AirAsia X “has undertaken a broad range of measures and corporate exercises to improve its financial position,” it recalled, including a set of restructuring exercises such as a debt restructuring scheme, a 99.9% share capital reduction, share consolidation, and a revision of its business plan. The revised business plan incorporates elements like a leaner and more viable cost structure with a primary focus on medium-haul flight operations and a network plan that saw the termination of unprofitable routes.
It has also “restructured all of its contracts and arrangements in relation to its fleet and overall operations to better align to its future size and requirements,” including “plans for manpower consolidation and optimisation.”
“We have managed to maximise the recovery of all of our revenue segments even though some of our fleet remains on the ground,” AirAsia X’s chief executive Benyamin Ismail said in a press release. He added that as of March 31, 2023, the airline’s cash position “is healthy” at MYR192.37 million ringgits (USD42.1 million), “without any outstanding debts, and has sufficient working capital for 12 months.”
The company recently bolstered its equity position by raising MYR50 million (USD10.9 million) by selling shares to investors such as AHAM Asset Management, AIIMAN Asset Management, and Lavin Group.
According to the ch-aviation fleets and ch-aviation capacities modules, AirAsia X currently operates fifteen A330-300s, eleven of which are active, on 17 scheduled routes across Asia and Australasia and has fifteen A330-900Ns and twenty A321-200NY(XLR)s on order.
