Amid the COVID-19 led slump, the Tata group has come to the rescue of its budget airline joint venture in India with Malaysia's AirAsia Group Bhd and has decided to pump in around $50 million in the cash-strapped airline. The fund infusion will be done via debt and equity, which will also raise the Tata group's share in the company to over 51 per cent, LiveMint reported citing sources.
The airline's Malaysian parent is struggling to raise funds amid losses due to Covid-19. The long-haul, low-cost carrier AirAsia X Bhd has run out of money and needs to raise to 500 million ringgit ($120.60 million) to restart the airline, Reuters had quoted deputy chairman Lim Kian Onn as saying last month. The airline also wants to restructure 63.5 billion ringgit ($15.32 billion) of debt and slash its share capital by 90% to continue as a going concern.
Also read: Cash-strapped AirAsia to begin charging fee for check in at airport counters
The airline said in September that it would begin charging customers a fee to check-in at airport counters, in part to encourage them to minimise physical contact with staff during the coronavirus pandemic. Travellers who do not check-in via the airline's website, mobile app or airport kiosk will be charged 20 Malaysian ringgit ($4.83) for domestic flights and 30 Malaysian ringgit for international flights, though some exceptions will apply.
Also read: AirAsia trading halted after auditor EY notes 'going concern' doubts
AirAsia had reported the biggest quarterly loss in its history in August, primarily due to the devastating impact the pandemic has had on travel demand, with revenue down 96%. The airline said it had applied for bank loans in its operating markets and had been presented with proposals from investment bankers, lenders and potential investors to raise capital.
Also read: Tata Group may bid for Air India by end of month; initiates due diligence
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