The future of Asia’s biggest budget airline, AirAsia, is in “significant doubt”, auditor Ernst & Young has said.
Shares in the Malaysian-based airline fell by more than 17% on Wednesday after being halted earlier in the day.
The airline’s founder and chief executive is tycoon Tony Fernandes, who also co-owns Queens Park Rangers (QPR) football club in the UK.
The world’s airlines have been hit hard by the sharp fall in passengers due to strict coronavirus travel restrictions.
Ernst & Young highlighted the airline’s huge debts in a statement to the Kuala Lumpur stock exchange late on Tuesday.
It said AirAsia’s current liabilities already exceeded its current assets by 1.84bn ringgit ($430m; £340m) at the end of 2019, before the start of the pandemic.
The Asian carrier’s financial performance and cash flow have been further hit by the grounding of its planes amid tight travel curbs and lockdowns.
This slump and AirAsia’s financial performance “indicate existence of material uncertainties that may cast significant doubt on the Group’s and the Company’s ability to continue as a going concern,” Ernst & Young said in its unqualified audit opinion statement.
On Monday, AirAsia reported a record quarterly loss of 803.8m ringgit. The budget airline started suspending flights in late March.
“This is by far the biggest challenge we have faced since we began in 2001,” Mr Fernandes said in a statement.
“Every crisis is an obstacle to overcome, and we have restructured the group into a leaner and tighter ship.”
“We are positive in the strides we have made in bringing cash expenses down by at least 50% this year, and this will make us even stronger as the leading low-cost carrier in the region,” he added.
AirAsia said it was in talks over joint ventures and collaborations that may result in additional investment. It has also applied for bank loans and is weighing proposals to raise additional capital.
- Stephen Appiah excludes Asamoah Gyan from his list of best Ghanaian players
- We will not allow any religious group to plunge Ghana into chaos – Muntaka
- CID probes 53 schools over alleged corruption in school feeding programme
- Kwabena Agyepong’s NPP membership re-instated
- Virologist warns of third wave of Covid-19 in Ghana
- #NSMQ2021: Mfantsiman Girls SHS dumped for the third time in a row at regional championships
- Manu, who delayed Ghana’s 4x100m baton, had never received a baton before – Coach
- Family sues Daasebre Oti Boateng for failing to replace a statue he destroyed
- Students of Takoradi Technical University reject certificate
- Customs driver jailed for selling official vehicle
Italian woman accidentally given six shots of Covid-19 vaccine
Drake is Billboard’s Artist of the Decade, will receive honor at 2021 Billboard Music Awards
We’ll work for food security reserves – ECOWAS
Pandemic could lead to more child obesity, WHO Europe office warns
French court fines, sentences Oppong Weah’s son for reckless partying
Salifu Ibrahim not being swayed by man of the match awards
SYND-Ghana backs Lands Ministry’s fight against exploitation of forest reserves
‘I left home so I can take care of my family,’ – A ‘kayayo’ on why she is on the streets
Make a deliberate effort to own a copy of the 1992 Constitution – NCCE
Parliament to reconvene on May 25 to commence second meeting
Dr Mavis Owureku Asare: Wesley Girls’ no fast policy is not about religion
NSMQ 2021: Tamasco and 3 others secure tickets to Accra on day one of Northern Regional qualifiers
Former British High Commissioner to Ghana, Craig Murray jailed for contempt in the UK
Even though it hurts to see you with her, I’m genuinely happy for you
To my ex-lover that I can’t move on from