MOF: No plans yet to financially support AirAsia

Putrajaya has yet to ink any agreement to provide low-cost aviation company AirAsia with financial support.

The government’s affirmation on the matter came after reports of growing financial pressures faced by the budget airline amid skyrocketing jet fuel costs, with the company seeking RM1 billion from international debt markets and RM700 million in local credit facilities.

While the Finance Ministry had reportedly hired a consultant to assess AirAsia’s financial standing, company co-founder and adviser Tony Fernandes previously denied seeking financial assistance from the government, but said it would be “foolish” to reject any offered help.

In a parliamentary written reply yesterday, the Finance Ministry did not directly confirm whether AirAsia had sought the government’s assistance to aid its financial woes.

However, it said that any application for government support, from any company in any sector, is considered based on national and public interest, the government's fiscal sustainability, and the protection of public funds, in line with existing laws and procedures.

“For now, the government has not made any agreement or commitment to provide financial support to AirAsia, whether in the form of guarantees, loans, or public fund injections.

“The government will not comment on any speculation or figures reported by the media, so as not to affect the market as well as the interests of employees, customers, and other stakeholders of the companies concerned,” it added.

The Finance Ministry said this in response to a query from MCA’s Ayer Hitam MP and former transport minister Wee Ka Siong, who sought details on whether the government is considering any guarantee, loan, or injection of public funds to AirAsia.

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In its response, the ministry added that the government has taken note of issues raised regarding AirAsia, including reported losses in its recent quarterly financial results.

“AirAsia has attributed these losses mainly to the sharp rise in jet fuel prices following developments in the West Asia conflict.

“As part of monitoring efforts, the government holds regular engagements with players in the aviation ecosystem, and seeks views from the industry, technical experts, and other parties, as is also conducted for other economic sectors affected by the West Asia crisis,” it said.

Important aviation member

The ministry highlighted that AirAsia plays an important role in the nation’s aviation ecosystem, recording about 41 percent of the 104.5 million passenger movements at airports operated by Malaysia Airports Holdings Berhad (MAHB), and nearly 60 percent of domestic passenger movements in 2025.

A large part of air connectivity in Sabah and Sarawak also depends on AirAsia flights, which carried 62 percent and 70 percent of total passengers, respectively, in 2025.

In Peninsular Malaysia, among the states with high percentages of AirAsia passengers are Johor (70 percent), Terengganu (56 percent), Kedah (56 percent in Langkawi and 49 percent in Alor Setar), and Kelantan (46 percent).

Meanwhile, at KLIA2, AirAsia carried three-quarters of total passengers in the same year.

On Oct 12, Transport Minister Anthony Loke denied holding any recent meetings with AirAsia, following a Reuters report that Fernandes had met officials from the Transport Ministry and the Finance Ministry to discuss aviation-related matters.

At the time, Loke said he was unaware of any such discussions involving his ministry, adding that there had been no meetings or agreements with AirAsia in the past few weeks.

The report also cited sources who claimed Fernandes had discussed the possibility of the government backing the airline’s fundraising efforts, subject to unspecified conditions.

Last month, a separate Reuters report quoted sources as claiming that Putrajaya had asked Malaysia Airlines and Batik Air whether they could absorb AirAsia’s domestic market share.

However, Fernandes later labelled the report as “ludicrous”, dismissing claims that the government is weighing contingency plans for the airline’s domestic operations.

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