CGS-CIMB drops target price on loss-making AirAsia to zero

It added that the company's survival depends on it securing a new RM500 million bank loan, but the probability of obtaining one is low as no shareholder support seems forthcoming.

It added that AAX is in a"desperate attempt" to grasp at all the straws it can find, and it believes that the company has also not been paying its lessors, maintenance providers and suppliers since Q4 FY19. "AAX burned through RM140 million in cash during Q1 FY20 and only had RM219 million left as at March 31. Assuming Q1 FY20 salary costs of RM105 million are reduced to RM70 million per quarter for the rest of the year, AAX has enough cash to pay salaries only until the end of 2020, not even considering its obligations to its suppliers."

The report added that AAX is currently negotiating with suppliers to reduce aircraft lease rates and to pay on a per-use basis, to return its leases aircraft earlier, to reduce airport charges, to revisit terms with business partners and to restructure its fuel hedges with the remaining 30 per cent of counterparties that have yet to agree to defer payments.

It also said that domestic air travel is recovering in Malaysia, but with AAX being a long-haul airline, it will have to wait a lot longer for international borders to reopen.For daily updates on weekdays and specially selected content for the weekend. Subscribe to

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