Published on : Saturday, November 21, 2020
AirAsia is reviewing its initial plan of investing in troubled Indian airline JV after experiencing cash crush owing to bankruptcy suffered by the Japan unit. Bo Lingam, president of airlines at AirAsia Group mentioned that their business in India and Japan are draining out cash and this is adding to the financial stress of the group. Going by the present situation, it is of utmost importance to reduce cash investment and though this is necessary for AirAsia India, it is however difficult in the present condition.
AirAsia Japan Co. filed for bankruptcy with the Tokyo District Court earlier Tuesday, after flagging last month it would cease operations in the country as the coronavirus pandemic that’s wiped out travel globally took its toll. Airasia Japan received a provisional administration order from the court Tuesday, it said in a statement.
The group has even stopped funding AirAsia India and the future of the brand is now mainly depended on 51% shareholder, Indian conglomerate Tata Group. AirAsia, which reported its largest loss on record in the second quarter ended June 30, has been under immense pressure this year as Covid-19 roils the aviation industry. Airlines globally have been plunged into crisis, with many cutting thousands of jobs and trying to secure funds for survival. Some, pushed to the brink, have gone out of business.
AirAsia Japan on the other hand has cancelled all flights, including one between Nagoya and Taipei. Services operated to Japan by AirAsia’s other carriers in places like Thailand and the Philippines won’t be affected. International services to Japan from Malaysia, Thailand and the Philippines will resume as travel restrictions are eased and borders reopen, the airline said Tuesday.