Malaysia-based AirAsia airline has cease operations in Japan effective immediately as it tries to reduce cash burn amid the covid-19 outbreak that has almost wiped out all travel demand globally.
AirAsia Japan stopped operations as of Monday. AirAsia southeast Asia’s second-biggest budget carrier said in a statement in Japan. Further steps on the decision will be made in accordance with applicable laws and regulations including the Japan Civil Aeronautics Act, it said.
The AirAsia been under immense pressure this year as Covid-19 roils the aviation industry. It reported its largest loss on record in the second quarter ended June 30, 2020. AirAsia’s Chief Executive Officer Tony Fernandes has also been in talks for joint ventures and collaborations that may result in additional investment.
“We have concluded that it would be an extremely challenging feat for us to continue operating without any visibility and certainty of a post-pandemic recovery path,” said Jun Aida, the chief operations officer of AirAsia Japan. “This painful decision to cease operations was decided neither in haste nor taken lightly.”
AirAsia India under review
Malaysia-based AirAsia said previously it was evaluating its operations in Japan. Even more Reuters report earlier this year AirAisa’s Indian operations may also be under review. India’s aviation minister said over the weekend that AirAsia is shutting up shop in the South Asian nation. A comment his office later suggested was taken out of context.
A spokesman for AirAsia India, which is majority owned by Indian conglomerate Tata Group, declined to comment.
AirAsia’s long-haul arm AirAsia X, meanwhile, has said it needs to reach agreements with major creditors. Above all to restructure outstanding debts. AirAisa is facing “severe liquidity constraints” that threaten its ability to resume flying and continue as a going concern.
Meanwhile, Airlines globally have grounded thousands of planes as governments restricted movement to curb the spread of Covid-19. Airlines have been raising funds via rights offerings and seeking state support in their efforts to stay afloat. Travel demand won’t return to pre-Covid level until 2024, according to the International Air Transport Association.
AirAsia Starts Charging for Checking in at Airport Counters
Cash-strapped low cost airline AirAsia reported it would begin charging customers a fee to check in at airport counters. The fee is in part to encourage customers to minimize physical contact with staff during the coronavirus pandemic.
Travellers who do not check in via the airline’s website, mobile app or airport kiosk will be charged $4.85 for domestic flights. For international flights, customers will be charged $7.25 though some exceptions will apply.
AirAsia Group Chief Operations Officer Javed Malik said the fees would help motivate travellers to make use of the airline’s investment in digital technology.
“In view of the Covid-19 pandemic, these self-check-in facilities have become very crucial in minimizing physical contact between our guests and staff,” he said in a statement.
AirAsia last month reported the biggest quarterly loss in its history due to the devastating impact the pandemic has had on travel demand, with revenue down 96%.
The airline said it had applied for bank loans in its operating markets and had been presented with proposals from investment bankers, lenders and potential investors to raise capital.