AirAsia co-founder Tony Fernandes met Malaysian finance ministry officials to discuss possible government support for the airline, three people familiar with the matter told Reuters. Fernandes denied that financial assistance was discussed.

According to the Reuters exclusive published on October 12, 2026, the meeting took place about two weeks ago. The sources said it reflected the government’s growing concern about the finances of Malaysia’s largest domestic airline after a sharp rise in jet fuel prices. 

Two of the sources said the talks centred on the government backing AirAsia’s fundraising if the airline accepted certain conditions, which are still under discussion. Reuters could not determine what those conditions are.

Fernandes, speaking for the airline, told Reuters on Friday that he met finance and transport ministry officials in the week beginning Sept 28, at his own request. He said the talks were about aviation costs such as airport charges and fuel. “There have been no discussions on financial assistance with the government,” he said.

He said he had not asked the government for help and the government had not raised funding concerns with him. He expressed full confidence that AirAsia could get through the situation without state aid, as it did during the Covid-19 pandemic. But he said the airline would accept help from any government in the countries where it operates, including Malaysia, Thailand, and Indonesia. He added that he had earlier asked the government to help the airline secure loans from Malaysian banks, which he prefers for their local-currency terms.

Two of the sources told Reuters that representatives of Alton Aviation Consultancy also attended the meeting. Reuters previously reported that the finance ministry hired the firm to assess AirAsia’s funding needs. The finance ministry declined to comment, and Alton did not respond to Reuters’ requests for comment.

Malaysian Transport Minister Anthony Loke told a press conference on Monday that neither he nor ministry officials had met AirAsia in the past two to three weeks. He said the airline may have held talks with the finance ministry, noting that carriers regularly meet the government.

AirAsia shares were trading about 5% lower on Monday afternoon, Reuters reported.

The airline has been hit by a steep rise in jet fuel costs. Reuters said fuel prices jumped 66% in the April-June quarter from the previous quarter to an average of $183 a barrel, following the US-Israeli war on Iran. AirAsia posted a net loss of 831 million ringgit (about $204 million) for the quarter, which also included 331 million ringgit in foreign-exchange losses. Its shares have fallen more than 70% this year.

As of June 30, the airline had cash and bank balances of 954 million ringgit ($233.65 million) against current liabilities of 18.4 billion ringgit. Fernandes says AirAsia holds about 60% of Malaysia’s domestic aviation market and employs 26,000 people.

Reuters said the government worries that AirAsia’s weakness could hurt air connectivity, tourism, and related businesses, including the state-linked airport operator Malaysia Airports Holdings Berhad. Last month, Reuters reported that the government had asked Malaysia Airlines and Batik Air whether they could absorb AirAsia’s domestic market share as part of scenario planning. AirAsia shares fell as much as 21% the next day.

AirAsia is seeking up to $1 billion from international debt markets and 700 million ringgit in local credit facilities, mainly to refinance existing debt. Fernandes said he expects the $1 billion raise to close between December and February. Half would go to refinancing expensive loans and the rest to working capital and clearing “extended liabilities.” He said AirAsia is budgeting for 12 months of high oil prices and has not yet seen demand weaken, with more than 80% of seats filled even when jet fuel hit $200 a barrel.

The claims about the talks and the airline’s finances are as reported by Reuters, which relied on unnamed sources, and have not been independently verified by Aviation Express.

Source: Reuters, exclusive report