AirAsia Group is seeking changes to the terms of a $200m private credit facility provided by Ares Management and Indies Capital Partners as the airline looks to improve the flow of payments to aircraft lessors, according to a report by Bloomberg citing unnamed people familiar with the matter.
The Malaysian carrier has asked the lenders to permit revenue from selected flight routes to be shared with aircraft leasing companies to which AirAsia owes money. That revenue is currently pledged to Ares and Indies as security for repayment of the private credit facility.
Allowing the proceeds to be distributed between the lenders and lessors could provide the aircraft owners with greater visibility over future payments, the people said. Any amendment would require the approval of both Ares and Indies, and discussions may not ultimately result in an agreement.
AirAsia, Ares and Indies reportedly declined to comment.
The request comes as the airline faces mounting financial pressure following two consecutive quarterly losses. Higher energy prices stemming from the US-Iran conflict have increased operating costs, while AirAsia’s limited fuel hedging left it particularly exposed to the rise in prices.
The resulting strain has prompted the airline to seek delays to some aircraft lease payments. AirAsia is also pursuing additional financing, including as much as $1 billion in international debt and MYR700 million ($172 million) through the domestic credit market.
Earlier this month, the company said it was working to consolidate its borrowings into a single, lower-cost financing structure with longer maturities and improved terms.
The existing $200m private credit facility forms part of a larger $443m dual-tranche financing raised in 2024. The financing was used to refurbish aircraft that had remained grounded during the pandemic and refinance lease obligations, with future ticket sales from key AirAsia routes pledged as security.
AirAsia has repaid most of the $243m in lease liabilities included in the original financing structure, according to the people familiar with the matter.
