AirAsia Group gets approval for a MYR 500 million government-backed loan

Aviation Updates Philippines – As it continues to mount its recovery, Malaysia's AirAsia Group announced it has received approval for a 80% guaranteed loan backed up by the Malaysian government of up to MYR 500 million (~USD $119.6 million). 

Image: AirAsia A320 (Credit: AirAsia Group)

The loan – 80% guaranteed by the government – is part of the Malaysia's Economic Stimulus Package following the outbreak of the COVID-19 pandemic under the Danajamin Prihatin Guarantee Scheme.

AirAsia has stated it has been approved by the group's lenders under a club deal term financing (Club Facility). The guarantee for the Club Facility is provided by Malaysia's Danajamin Nasional Berhad (Danajamin) via Syarikat Jaminan Pembiayaan Perniagaan (SJPP), a wholly-owned entity of the Ministry of Finance, Government of Malaysia.

Accoriding to AirAsia, the financing under the Club Facility is earmarked for working capital purposes, which will support staff costs and key operating expenses such as aircraft maintenance as the airline group prepares to boost its operations leading up to the reopening of international and domestic borders.

“AirAsia has been a major contributor to the Malaysian economy by providing connectivity to facilitate tourism, trade and investment activities. We have also been pivotal in generating a significant number of job opportunities and empowering local SMEs, especially through our digital ventures,” said AirAsia Executive Chairman Datuk Kmarudin Meranun.

“This approval from the Malaysian government is a strong endorsement of AirAsia Group’s ability to recover fast and provides a welcome boost to our overall fundraising strategy as we prepare to return to the skies in all of our key markets,” Meranun added.