Malaysia is considering how to support AirAsia as the low-cost airline faces pressure from high jet fuel prices and currency movements, but the government will not simply inject money into the privately owned carrier, according to former transport minister Anthony Loke.
Loke said the finance ministry was reviewing possible forms of financial assistance. The transport ministry is not leading the process, although the issue had been discussed at cabinet meetings before Loke resigned from his ministerial post during the week of 13 November.
AirAsia is a private company, in contrast with state-owned Malaysia Airlines. Loke said any support would therefore need to be provided through a regulated arrangement rather than an unconditional transfer of public funds.
“It has to be a formal kind of arrangement. Government is not going to pump in money just like that.” — Anthony Loke
Finance ministry examining options
The review comes as AirAsia contends with two cost and earnings pressures: elevated jet fuel prices and fluctuations in currency values. No specific assistance package, amount or implementation date has been announced.
Loke said the discussions involved several possible options, with the finance ministry continuing to assess how support could be structured. His comments set out the government’s position that any intervention must protect public funds while recognising AirAsia’s importance as Southeast Asia’s largest low-cost airline.
- Airline: AirAsia
- Country: Malaysia
- Issues under review: high jet fuel prices and currency swings
- Government department assessing options: Malaysia’s finance ministry
The distinction between AirAsia and Malaysia Airlines is central to the review. While Malaysia Airlines is state-owned, AirAsia operates as a private company, meaning that any government-backed measure would have to follow a formal and regulated process. The government has not said which mechanism it is considering or whether an agreement will be reached.
The review places AirAsia’s financial pressures within a wider period of cost volatility for low-cost carriers. For Malaysia, however, the immediate question is how to address the airline’s exposure to fuel and foreign-exchange movements without treating a private carrier as a direct recipient of public funds.
