The Bursa Malaysia has rejected an application by AirAsia X (D7, Kuala Lumpur International) to exit PN17 status. AmInvestment Bank Bhd, which is assisting the low-cost carrier in formulating a PN17 regularisation plan, lodged a filing with the stock exchange on October 19 on behalf of the airline, saying the Malaysian bourse had informed them of the knockback in a letter dated October 18.

The stock exchange issues PN17 notices to listed entities in financial distress, instructing them to get their financial affairs in order and formulate a regularisation plan, which typically must be submitted to the bourse for approval within 12 months of the entity slipping into PN17 status.

The trigger for AirAsia X's PN17 notice was an October 2021 disclaimer of opinion by auditors Ernst and Young in the audited financial statements. Since then, the Bursa Malaysia has granted the airline several extensions to submit its regularisation plan. The extension accompanying the exit rejection now gives AirAsia X and AmInvestment Bank until January 17, 2024, to submit the plan.

After reporting a MYR5.5 million ringgit (USD1.2 million) net profit for the three months to June 30, 2023, and a quadrupling of revenues compared to the same three-month period in 2022, AirAsia X applied to the Bursa Malaysia in July to exit PN17 status, based on its improved financial performance. At the Paris Air Show in June, Capital A founder and CEO Tony Fernandes was optimistic that AirAsia X would soon exit PN17 status. "It is a huge exercise, which is almost as big as restarting the airline company. I am very confident, and let's leave it at that," he said.

The stock exchange did not disclose why it had rejected AirAsia X's application. However, the Malaysian airline industry is in turmoil following the recent collapse of MYAirline (MYM, Kuala Lumpur Subang), and there is some local media speculation that authorities are now taking a tougher stance on the business and financial activities of airlines.

According to ch-aviation PRO airlines data, AirAsia X flies to 23 destinations in 12 countries. It operates a fleet of seventeen A330-300s and has a further fifteen A330-900Ns and twenty A321-200NY(XLR)s on order at Airbus. In this week's filing, AmInvestment Bank said AirAsia X will consider all available options (including the possibility of an appeal) and announce the next course of action in due course.