(ANSWER THIS QUESTION BASEDON THIS CASE )

2. By referring to the Presentation A titles in the MGM 4136 Current Issues In Management Module, identify and discuss what are the TWO (2) areas Air Asia should focus in order to recover from this crisis?

P PREM KUMAR (Nikkei Staff Writer) July 6, 2020

KUALA LUMPUR Low-cost Southeast Asian carrier AirAsia Group reported a 804 million ringgit ($188 million) first-quarter loss on Monday, reversing a 96 million ringgit profit for the same period last year.

Founded by Malaysian tycoon Tony Fernandes, AirAsia attributed the loss to collapsed demand for air travel in February and March 2020 due to the coronavirus pandemic.

Capacity reductions were mainly from Malaysia and the Philippines with a reduction of capacity of 17% and 1% respectively as domestic routes and international routes were halted mid-March, AirAsia said in filing to Malaysian stock exchange Bursa Malaysia Bhd.

Indonesia, however, increased its capacity by 10% by redeploying the additional international routes capacity to domestic markets, the company said.

The COVID-19 crisis has resulted in border closures in most of AirAsias key markets including Malaysia, Thailand, Indonesia, the Philippines, China and India, resulting in a 22% reduction in total passengers carried in the first quarter to 9.85 million.

AirAsia Japan, in which the group holds a 67% share, recorded a loss of 1.24 billion Japanese yen ($12 million) for the three months to March 31.

Southeast Asias biggest low-cost airline said it had started the year well, before market conditions deteriorated abruptly in February as the coronavirus outbreak began to spread.

AirAsia said it remains confident that it has enough working capital for the rest of the year despite operating at only 50% capacity.

In its statement to the stock exchange, AirAsia reported 270.1 million ringgit worth of fair value losses on derivatives, fuel hedging losses worth 110 million Ringgit, and 243 million ringgit in additional depreciation and lease liabilities on operating aircraft.

AirAsia resumed domestic travel schedules in Malaysia at the end of April, in Thailand on May 1, India on May 25, the Philippines on June 5 and Indonesia on June 18.

We are gradually adding frequencies and opening routes in the domestic sector, with the advice and regulations from government and health authorities, AirAsia said, adding that demand has so far been positive, with load factors increasing steadily.

The airline is also looking forward to the gradual reopening of international borders, recognizing that air transport provides the connectivity that is essential for the resumption of economic activities.

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The formation and discussion of travel bubbles and green lanes with key economic partners with a low infection rate and proven pandemic curbing systems, is a step in the right direction, the airline said.

Steps were currently being taken to sustain working capital including seeking payment deferrals from suppliers and lenders, restructuring of a major portion of its fuel hedges, as well as salary sacrifice and re-negotiating of contracts for management and senior employees.

Confirmed initiatives to-date are estimated to result in at least a 30% cost reduction year-on- year in 2020.

The airline has also confirmed that it has applied for loans in all its operating countries to shore up liquidity, and that management is considering a range of capital raising proposals to strengthen its equity base.

In addition, AirAsia has ongoing deliberations with a number of parties for joint-ventures and collaborations that may result in additional third-party investments in specific segments of the groups business, the airline said.

https://asia.nikkei.com/Business/Travel-Leisure/AirAsia-suffers-painful-loss-as-COVID-19-crisis-bites

MGM 4136 CIIM ASSESSMENT 01 A CASE STUDY ON AIR ASIA CRISIS 10.00 AM (26 NOV 2021) 09.00 AM (27 NOV 2021)

Please answer the following questions and submit the answers before 9.00 am on 27 November 2021.