AirAsia shares fall as carrier rethinks India investment

Shares in AirAsia fell as much as 8% on Wednesday after the Malaysian budget carrier said it would review its investment in India, the strongest signal yet it is reassessing its south Asia business. The statement Tuesday night came hours after AirAsia’s Japanese unit filed for bankruptcy in the Tokyo District Court, citing “insolvency resulting from a demand slump in travel induced by lockdown restrictions related to the coronavirus pandemic”. AirAsia’s Japan and India businesses had been “draining cash, causing the group much financial stress”, said Bo Lingam, AirAsia president. “Cost containment and reducing cash burns remain key priorities evident by the recent closure of AirAsia Japan and an ongoing review of our investment in AirAsia India.” Tony Fernandes, the Malaysian tycoon who owns AirAsia, said last month that there was “no discussion on exiting India” or stopping funding for its Indian airline, which is a joint venture with the Tata Group.  “AirAsia Japan and AirAsia India were relatively new ventures for them,” said Paul Yong, equity analyst at DBS. “It’s no surprise they are reviewing these first given the parent company needs to preserve resources for itself first.” The company said the total cost of investment in AirAsia Japan had been fully written down. <br/>