AirAsia X at Risk of De-listing After Auditors Issue Disclaimer | New

0

Besieged long-haul, low-cost airline AirAsia X could be delisted from the Malaysian stock exchange if it fails to restructure its business.

The announcement comes as the airline has been officially classified as a financially troubled company, after its auditors, Ernst & Young, issued a disclaimer on its financial statements for the 18 months ended June 30.

Since the onset of the coronavirus pandemic, AirAsia X has been largely grounded, operating a limited program of repatriation and cargo-only flights, under global travel restrictions.

The airline, which is linked to the AirAsia Group, posted a record operating loss of MYR 24.5 billion ($ 5.9 billion) for the quarter ended June 30.

Ernst & Young auditors in an Oct. 29 report note that the pandemic has “caused a significant drop in demand for international air travel which has had an impact … [AirAsia X’s] financial position, financial performance and cash flow ”.

They add: “These events or conditions indicate the existence of significant uncertainties which may cast significant doubt on [AirAsia X’s] ability to continue operating.

However, the auditors note that the validity of AirAsia X’s ability to continue operating would depend “heavily” on the “successful implementation” of several initiatives, including a debt restructuring project, a fundraising exercise. , as well as a revised business plan which sees the airline “operating a leaner and more sustainable cost structure”.

“Given the multiple uncertainties… we are unable to form an opinion on the financial statements due to the potential interaction of uncertainties and their possible cumulative effects on the financial statements,” the auditors write.

In a separate stock market file, AirAsia X says it is “taking the necessary steps” to address concerns raised by its auditors, which have triggered Bursa Malaysia’s financial distress.

Under the stock market requirements, AirAsia X, which will meet with its creditors on November 12 regarding the restructuring of its debt, will have one year to “regularize” its financial situation, under penalty of being written off.

Leave A Reply

Your email address will not be published.