Malaysian Carrier AirAsia X No Longer Classified As A Distressed Firm

Malaysia's budget airline AirAsia X announced on Tuesday that it is no longer classified as a financially distressed firm. This development lifts the threat of being de-listed from Malaysia's stock exchange.


The Journey to Recovery

AirAsia X and its parent company Capital A saw deep losses following a plunge in demand due to the pandemic and have scrambled to raise funds. Bursa Malaysia Securities classified the firm as PN17, or a financially distressed company, last year. Such firms may be de-listed from the exchange if they fail to stabilize their finances within a set time frame. AirAsia X undertook a broad range of measures to improve its financial position, including debt restructuring, share consolidation, and a revision of its business plan. As part of the revised business plan, it focused on medium-haul flight operations, terminated unprofitable routes, and recalibrated its focus on routes with proven loads and yield performance. "AAX has also during this time deferred all investments in new and immature routes," it said, adding that it has restructured all contracts and arrangements about its fleet and overall operations.


The Outcome

The efforts of AirAsia X have borne fruit, with the airline reporting three straight quarters of profit and positive shareholders’ equity. This led to the airline applying to Bursa Malaysia to be removed from the exchange’s financially distressed category. Following the upliftment from Practice Note 17 (PN17) status by Bursa Securities, AirAsia X  and parent company Capital A were among the two most active counters on Bursa Malaysia.

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The removal of the distressed firm classification marks a significant milestone in AirAsia X's recovery journey. It underscores the resilience of the airline in navigating through the challenges posed by the pandemic and sets the stage for its future growth.

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