Low-cost long-haul carrier AirAsia X (AAX) is planning to raise less money in a rights issue than it initially planned due to improved cash flow and a robust business outlook.
The airline will raise RM116 million ($28 million) in a rights issue and RM50 million ($12 million) in a special rights issue. Initially, the airline planned to raise up to RM300 million ($72 million) and a special issue of RM200 million ($48 million) as part of its restructuring plan.
“We will be able to sit through any eventualities in the next couple of years even if borders do not open, which however will not be the case,” AirAsia X chief financial officer Andrew Littledale announced in a statement.
Littledale added: “A larger fund raise is now not only unnecessary but will also be punitively dilutive particularly to existing retail shareholders who may not be able to fund a bigger rights issue at this difficult time.”
During the quarter ended December 31, 2021, AirAsia X has narrowed its operating loss to RM12 million ($3 million) due to profitable cargo operations.
According to the statement, AirAsia X plans to have 11 of its A330s fully operational by the end of October 2022. The carrier’s chief executive Benyamin Ismail also outlined plans to lease another four A330s for “a full resumption of passenger flights when borders open with a targeted fleet strength of at least 15 A330s.”
In mid-February 2022, AirAsia X restarted passenger operations with a weekly service from Kuala Lumpur to Sydney, almost two years after the global pandemic brought air travel to a halt.
AirAsia X, which has no domestic routes, has been significantly affected by the ongoing COVID-19 pandemic. But after its restructuring, the airline said it saw “light at the end of this long tunnel”. AAX first announced its debt restructuring scheme as a measure to escape liquidation in October 2020.