MANILA, Philippines — Low-cost carrier AirAsia Philippines plans to secure fresh capital from financial institutions to support its operations amid the ongoing global health crisis affecting the aviation industry.
“We are in talks with financial institutions to acquire or raise fresh cash for working capital purposes,” AirAsia Philippines CEO Ricky Isla told The STAR.
Isla did not elaborate on the details, particularly the amount the company intends to raise at the moment.
“The encouraging results of the gradual operation of our commercial flights will help us to get some positive support from banks along the way,” he said.
Travel restrictions brought about by the COVID-19 pandemic have been pummeling airlines globally.
The pandemic’s impact on local carriers has already been immense, with all three airlines having been forced to retrench workers to manage losses.
Cebu Air Inc., the operator of the country’s largest budget carrier Cebu Pacific, early this month announced plans to raise up to $500 million in fresh capital through the issuance of convertible preferred shares and private placement of convertible bonds to strengthen its balance sheet.
Shareholders of flag carrier Philippine Airlines, meanwhile, have infused capital and provided funding to sustain the airline’s liquidity.
For the second quarter, AirAsia Philippines posted a P2.3 billion net loss, a reversal of the P353 million net income recorded in the same period last year.
The airline posted a 99 percent plunge in the number of passengers carried during the second quarter as the airline hibernated its fleet from March 20 to June 4.
Isla earlier told The STAR the company has shelved anew its plan to go public with its supposed initial public offering (IPO) by the third quarter of 2020 to the first quarter of 2021 not pushing through.
The firm’s IPO is not seen happening by next year or even the year after, he said.
This fourth quarter, however, AirAsia Philippines is expecting to recover domestic capacity up to 60 percent of pre-COVID-19 levels.
The airline has also welcomed the government’s decision to allow non-essential overseas travel starting on Oct. 21.
“While we look forward to mounting more international flights soon, traveling to various regional destinations will still greatly depend on the restrictions imposed by its respective governments,” Air-Asia Philippines spokesperson Steve Dailisan said.
“It would be more helpful to boost domestic air travel and increase airlines load factor by exploring the implementation of PCR antigen with collaborative efforts from the national government, LGUs’s and airline companies. From our end, we continue to reassure the safety of our flying public from ground handling, in flight and disembarkation at point of destination, observing the highest level of health protocols,” he said.
The family of Rep. Michael “Mikee” Romero through F&S Holdings owns 60 percent of AirAsia Inc., operator of AirAsia Philippines, while Air Asia Bhd founders Tony Fernandes and Kamarudin Meranun own the remaining 40 percent.