Malaysia’s AirAsia X completes debt rejig, reaps $7.9bn

AirAsia X (D7, Kuala Lumpur Int’l) has completed its debt restructuring, allowing the low-cost long-haul affiliate of Capital A to reverse MYR33 billion ringgit (USD7.87 billion) in provisions to cover for these liabilities back into profits for the next quarter, it said in a statement.

The pandemic-ravaged airline’s debt restructuring proposal was approved by its creditors last November and by the High Court of Malaya in December.

Under the proposal, it was to repay just 0.5% of its more than USD8 billion debt pile and terminate supply contracts. As part of the deal, Airbus (AIB, Toulouse Blagnac), the carrier’s biggest creditor, agreed to cut its outstanding order book for the airline for seventy-eight A330-900s and thirty A321-200NX(XLR)s to just fifteen and twenty of them, respectively.

The plan was initially proposed in October 2020 as an alternative to liquidation.

“This is another significant step in rebuilding AirAsia X, post-pandemic. We are returning to the skies in a robust position,” AirAsia X CEO Benyamin Ismail said in the March 16 statement. “Cargo has been a strong lifeline for AAX and our recovery is already underway as a combination carrier with equal emphasis on cargo and passenger revenues. […] In the next two months we will recommence passenger services to several more international destinations in line with borders reopening.”

AirAsia X revealed in January that it had signed a medium-term charter agreement with logistics firm GEODIS to operate scheduled cargo services out of Kuala Lumpur Int’l.