AirAsia Group Bhd shares plunged as much as 21% to their lowest level in almost four years after reports that the Malaysian government had held contingency discussions with other local airlines over potentially absorbing the carrier’s domestic market share.
The talks with Malaysia Airlines Bhd and Batik Air are part of scenario planning as authorities monitor AirAsia’s financial position, Reuters reported, citing two people familiar with the matter.
Shares in sister company Capital A Bhd also fell as much as 18% to their lowest level in more than a year.
The reported contingency discussions have raised fresh concerns over AirAsia’s financial position after the carrier reported its largest quarterly loss in four years last month.
AirAsia is also seeking to amend the terms of a US$200 million private credit loan, according to Bloomberg News, while the airline said earlier this month that it planned to raise more than US$1 billion to refinance high-cost debt.
The airline has faced increased financial pressure after energy prices surged following the outbreak of war in the Middle East, with its limited fuel hedging adding to the impact of higher costs.
AirAsia did not respond to requests for comment.
The stock has fallen almost 70% this year, making it the worst performer among the 56 members of the Bloomberg World Airlines Index.
Bloomberg
