AirAsia X (D7, Kuala Lumpur Int'l) has proposed to its creditors to restructure MYR63.5 billion ringgits (USD15.3 billion) of liabilities through a reconstitution into an acknowledgement of indebtedness for a principal amount of up to MYR200 million (USD48.2 million).

The Malaysian long-haul low-cost carrier proposed in a stock market filing that any outstanding amounts above the reconstituted value and all sums, such as interest, incurred after June 30, 2020, be waived. The carrier said that the scheme would enter into force if it is approved by at least 75% of participating creditors present during a forthcoming court-mandated meeting.

A source told The Edge Malaysia business daily that around 70% of the debt under the restructuring proposal is owed to Airbus. AirAsia X also reportedly owes approximately MYR6 billion (USD1.5 billion) to lessors.

According to the ch-aviation fleets advanced module, AirAsia X operates twenty-four A330-300s. It said it hoped to retain its fleet size of around 25 units in the future, although the aircraft would be used on a "rotational basis" in the near term. The airline has firm orders from Airbus for thirty A321-200Ns, seventy-eight A330-900s, and ten A350-900s.

The airline simultaneously proposed to consolidate its shares and reduce 90% of its issued share capital through consolidation of every ten shares into one share. This would translate into the reduction of the issued share capital from MYR1.53 billion (USD370 million) to MYR0.15 billion (USD3.6 million).

"The credit arising from the Proposed Share Capital Reduction of MYR1.38 billion will be used to offset the accumulated losses of the Company," the airline said.

Subject to all relevant approvals, AirAsia X said it hoped to complete both the debt restructuring and the share consolidation by the end of the first quarter of 2021.

The airline said it hoped "to begin operating with two aircraft in selected markets in the first quarter of 2021 and to gradually resume flights to all destinations by end-2021".

Meanwhile, while AirAsia X had no plans to shrink its fleet in the future, the airline's parent AirAsia Group is pursuing a downsizing strategy. Group Chief Executive Tony Fernandes told reporters during a briefing that the holding would not be taking any new aircraft in the near future and would also seek to return around 60 jets to lessors by the end of 2021.

"We are not going to buy new planes, and we are going to return as many as we can... I don't see us getting into a position where we want to buy planes for a number of years. And even if we want to buy planes, there will probably be a lot of cheap secondhand planes," Fernandes said.

Including the 24 A330s operated by AirAsia X, the whole group's fleet currently numbers 279 Airbus aircraft, of which 239 are narrowbody A320ceo and A320neo family twinjets. Fernandes said that by the end of the next year, the group's fleet would probably stand at around 180 aircraft. On top of the orders attributed to AirAsia X, the group also has firm commitments for thirteen A320-200Ns and 349 A321-200Ns.

Besides trimming its fleet, AirAsia (AK, Kuala Lumpur Int'l) has also indicated plans to lay off around 10% of its staff to cope with the reduced demand. Fernandes said he hoped to be able to rehire the affected personnel as soon as the crisis is over.