KUALA LUMPUR: Malaysia has made no agreement or commitment to provide financial assistance to budget airline operator AirAsia, the finance ministry said, though it acknowledged concerns over the carrier's financial health following a jump in jet fuel prices.
Reuters reported this month, citing sources, that AirAsia was in talks with the government over potential support. The airline's co-founder Tony Fernandes said the talks focused on aviation-related costs such as airport charges and fuel, not financial assistance
In a written parliamentary reply on Monday (Oct 19), the finance ministry said it was monitoring developments in Malaysia's aviation sector, including recent quarterly losses reported by AirAsia that were attributed to rising fuel costs stemming from the US-Israeli war with Iran.
The government was regularly engaging with aviation players and seeking views from industry and technical experts, as was the case for other economic sectors affected by the Middle East crisis, it said.
Any request for support from companies in any sector "will be considered based on the interests of the country and the people, the fiscal sustainability of the government and the protection of public funds, in accordance with applicable laws and procedures," the ministry said.
"To date, the government has not made any agreement or commitment to provide financing support to AirAsia, whether in the form of guarantees, loans or public fund injections," it said.
The ministry said AirAsia was a significant player in the aviation sector, accounting for around 41 per cent of the 104.5 million passenger movements recorded at airports operated by Malaysia Airports Holdings in 2025 and almost 60 per cent of domestic passenger movements.
The carrier also played a significant role in maintaining air connectivity in Malaysia's Sabah and Sarawak states on Borneo island, it said.