KUALA LUMPUR: The Malaysian government is considering ways to support AirAsia amid rising jet fuel costs and currency fluctuations, but any assistance will be structured to avoid exposing public funds to unnecessary risks, said former transport minister Anthony Loke.
Loke said the Finance Ministry was reviewing several options to provide financial assistance to the low-cost airline, rather than the Transport Ministry, following discussions at Cabinet meetings.
He stressed that AirAsia, unlike state-owned Malaysia Airlines, is a privately owned company and any government assistance would therefore need to be provided through a formal and regulated arrangement.
"Government is not going to pump in money just like that," he told Reuters in an interview on Wednesday.
Loke declined to disclose the options being considered, saying Prime Minister Anwar Ibrahim, who also holds the Finance portfolio, would determine the terms and conditions of any assistance.
The Finance Ministry and AirAsia did not respond to requests for comment.
Loke said the government needed to balance the airline's financial requirements with the need to safeguard public resources and maintain domestic and international air connectivity.
"Without jeopardising public funds, but at the same time maintaining air connectivity, which is important," he said.
AirAsia, which commands about 60% of Malaysia's domestic aviation market, had current liabilities of RM18.4 billion as at June 30.
Separately, Tengku Datuk Seri Zafrul Abdul Aziz, a senior political adviser to Anwar and chairman of the Malaysian Investment Development Authority (MIDA), said any government intervention involving a private company should prioritise the survival of the business and the protection of its employees rather than its shareholders.
Speaking to Reuters in a separate interview, Zafrul said government intervention in commercial activities should generally be avoided, although assistance could be justified for businesses considered strategically important to the country.
He clarified that his comments represented his personal views and were not an official government position.
AirAsia has been seeking to raise up to US$1 billion from international debt markets, alongside RM700 million in local credit facilities, to strengthen its financial position.
Co-founder Tan Sri Tony Fernandes told Reuters last month that the US$1 billion fundraising exercise was expected to be completed between December and February.
Fernandes had denied seeking government financial assistance but said the airline would be open to accepting support if it was offered.
The Finance Ministry said last month that it had not reached any agreement or made any commitment to provide assistance to AirAsia through guarantees, loans or direct injections of public funds.
Meanwhile, Loke said the Transport Ministry had coordinated several limited relief measures for airlines this year to ease operating pressures.
These included an extension of the credit period for aviation fees and charges imposed by the Civil Aviation Authority of Malaysia from 30 days to 60 days, effective May 1.
Loke described the measures as relatively modest but said they provided airlines with "some breathing space" amid elevated fuel costs.
He said the government was inclined to offer such relief because higher operating expenses could eventually be passed on to passengers through more expensive airfares, potentially weakening travel demand and affecting tourism and the wider economy.