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Thai AirAsia X is looking for new investors

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Thai AirAsia X needs major restructuring and new investors to prepare the airline to resume international routes next year after Thai AirAsia (TAA) secured additional funding for the airline last week.

Thai AirAsia X, a low-cost long-haul airline under the AirAsia group, has been grounded for nearly two years since the pandemic broke out in 2020. The fleet of 11 aircraft was reduced to seven earlier this year, said Tassapon Bijleveld, executive chairman of SET-listed Asia Aviation (AAV), TAA’s majority shareholder.

Bijleveld, also a shareholder of Thai AirAsia X, said the airline had to switch its wide-body Airbus A330 jets to cargo services to limit financial losses. Thai AirAsia X needs additional liquidity to prepare for passenger flights, which are expected to resume next year, he said.

Tourists are wondering when international flights will resume, and the airline responded by opening ticket sales for the Bangkok-Incheon (South Korea) route from April 2022 in hopes of reopening borders by then, Bijleveld said.

“Border closures should not be an option to prevent the spread of the Omicron variant, as the national economy and especially the tight tourism sector cannot afford to survive another lockdown,” he said.

Bijleveld said it has been more than two years since the pandemic broke out and the government has to learn to live with it by getting enough immunity, using vaccines and drugs, for local communities to run economic activities as usual.

He said that Thai AirAsia X, which is not yet listed on the stock exchange, is in negotiations with some potential investors and will enter the restructuring process next year.

The TAA received approval at a shareholders’ meeting on Nov. 26 to begin the restructuring plan, which would allow the airline to raise an additional 14 billion baht.

Under the new structure, Bijleveld will own 18% of the shares, up from 40.52% at the moment, while AirAsia Aviation, the investing company under AirAsia Group Berhad, will own 40.7%, followed by commercial banks with 5. 3% and new individual Thai investors at 5.2%.

While TAA is expected to receive the first allocation of fresh capital in mid-December, cost-cutting measures should be maintained until air traffic is fully restored.

Announcing mass layoffs last month, Bijleveld said TAA would have to say goodbye to more than 400 employees of its total workforce of 5,000. Some employees decided to join the early retirement program offered by the company, he said.

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