THE IMPACT OF COVID-19 TO THE AIR ASIA AIRLINE BUSINESS: AN

ANALYSIS ON BERITA HARIAN ONLINE'S REPORTINGS (MARCH-OCTOBER

2020)

STUDENT’S NAME AND MATRIC NUMBER:

NABILATUL HUDA BINTI AZHAR (1814824)

SUPERVISOR’S NAME:

DR. CHE AMNAH BINTI BAHARI

RKUD 2999 RESEARCH METHODOLOGY

SEM 1, 2020/2021
CONTENT

CHAPTER 1………………………….. 3-6

Introduction
Background and Context
Statement of the problem
Significant of the study
Research questions
Research objectives
CHAPTER 2………………………….. 7-26
Literature review
Conceptual framework
CHAPTER 3………………………….. 26
Method
CHAPTER 4………………………….. 26-29
Result and Discussions
CHAPTER 5………………………….. 30
Conclusion and Recommendations

2
Chapter 1

a) Introduction
In light of current events in the 21st century, it is becoming very hard to
overlook the presence of wars, crisis, and disasters that bring us to call the 21st
century as a century of crises. There are so many changes happened including the
outbreak of the COVID-19 pandemic, which affected human life within so many
aspects which are social entity, educational, and professional. This COVID-19 disease
could be a highly infectious and pathogenic viral infection affected by severe acute
respiratory syndrome coronavirus 2 (SARS-CoV-2), which developed in Wuhan,
China and blow-out around the sphere. The study discovered that SARS-CoV-2 is
associated with severe acute respiratory syndrome-like (SARS-like) bat viruses, hence
bats might be the likely primary reservoir. The middle source of basis and
transmission to human being is not identified, but, the rapid human to human transfer
has been established broadly. There is no clinically agreed antiviral drug or vaccine
accessible to be used against COVID-19. Though, few broad-spectrum antiviral drugs
have been estimated against COVID-19 in clinical trials, lead in clinical recovery1.
An extensive global shock generating a severe economic strike is formed by
COVID-19 pandemic and there has been a strike in all economic sectors globally. A
study shows that more than one third of world population was located under lock-
down due to this pandemic. The recovery of economies in this world from the global
pandemic and how long the regaining efforts would take is still inexact since the end
of the pandemic still cannot be seen. It seems very hard to avoid a global economic
collapse because of COVID-19 pandemic but it is ambiguous as to how long the
stagnation will last. The states in all over the world can fully mend from the pandemic
is indeterminate. The retrieval procedures will call for collaborative action of
governments, policy-makers, healthcare professionals as well as the common people.
If publics do not tolerate by the social distancing policies outlined by the government
and policy makers, a smooth recovery will be impossible2.
Air Asia airline is one of the businesses that has been affected because of
COVID-19 pandemic. COVID-19 pandemic affected Air Asia Group Bhd (Air Asia)
because total passengers dropped by 85 per cent to 1.91 million in the third quarter of
1
Muhammad Adnan Shereen, Suliman Khan, Abeer Kazmi, Nadia Bashir, Rabeea Siddique, “COVID-19
infection: Origin, transmission, and characteristics of human coronaviruses”, Journal of Advanced Research,
(2020): 91-98, accessed on November 23, 2020.
2
Shohini Roy, “Economic impact of covid-19 pandemic”, MS (Finance), Purdue University, 2020.

3
 2020 from 13 million in the same quarter last year. Despite the COVID-19 pandemic,
Air Asia's load factor decreased by 18 percentage points year-on-year to 66 percent,
the low-cost carrier said in a statement. Air Asia Malaysia reached a load factor of 68
percent with almost 1.8 million passengers in the quarter. Although capacity was
reduced in October following a government-imposed Movement Control Order, Air
Asia is working to recover to 60 per cent in the fourth quarter just like the period
before the transmission of COVID-19 in domestic capacity. 3 Aviation seems to be the
crucial part of transportation of any country which has been now come to end because
of the pandemic called COVID-19. Those airlines which are the basis of fast
transportation for travellers are now start to be blameable for transferring the virus
across the boundaries. In line for this, countries have highlighted the public health
over economic development and have paused their flying operations. On the other
hand, many countries have started some of its local flying operations to achieve the
essential flying resolutions of their people but that acquires only losses for them.
Study has decided that pandemic has violently impacted the aviation sector all around
the sphere which is significant for the growth of other sectors of economy.
General, passengers are the strength of this sector and nurturing their
willingness to travel would be a perplexing task for the airlines. Societies are prepared
with fear of transmission which have made them doubtful about travelling. Therefore,
aviation sector is essential by complex approach based upon their powers and market
opportunities. For this every force of environment such as government, banks, airline
owners, staff, passengers are necessary to participate supportively. At this time,
recovery speed of aviation is very slow but for future it has been expected that it will
bounce back with more power4.

3
Berita Harian Online, Penumpang AirAsia susut 85 peratus dalam suku ketiga tahun ini,
October 26, 2020, accessed on November 23,
2020,https://www.bharian.com.my/bisnes/korporat/2020/10/746562/penumpang-airasia-
susut-85-peratus-dalam-suku-ketiga-tahun-ini

4
Mehta P, “Aviation During and Post Pandemic COVID-19 – Impact and Strategies”, SF Journal of Aviation and
Aeronautical Science, (2020), accessed on November 21, 2020.

4
b) Background and context

The novel severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2)

epidemic outbreak appeared in December 2019 from Wuhan City, Hubei Province,
China and binge to the rest of the world. This disease was called COVID-19 by World
Health Organization. It became a concern of the world community when the epidemic
spread rapidly.

There has been a strike in all economic sectors globally and more than one
third of world population was located under lock-down. The recovery of the
economies in this world from the global pandemic or how long the regaining efforts
would take is still inexact. Aviation is the crucial part of transportation of any country
which has been now come to end because of the pandemic called COVID-19.
Therefore, this research was conducted to analyse the impacts of COVID-19
pandemic to the airline business particularly based on the reports from Berita Harian
Online and how to reduce the impacts so the airline business can survive throughout
the pandemic.

c) Statement of the problem

Since its emergence, the 2019 coronavirus (COVID-19) pandemic as the latest
universal risk has messed up business operations in all industries. The airline industry
is one of the first industries that was affected from the occurrence because the disease
is easily transmitted among individuals. Until now, there is no authorized medical
treatment for the disease, causing a terrific panic for world nations. Therefore,
governments around the sphere have forbidden cross-country transportation. The
market worth of the airline business has shortened since then.
The crisis would lead to consolidation and a knowingly minor business. Other
than that, they were alarmed about the possible changes in terms of state aid and how
that could disturb the level playing field in a post-Covid-19 aviation market. This
research aims to investigate thoroughly about the effects by analyzing the report in
Berita Harian Online websites and other relevant sources.

5
d) Significant of the study

The COVID-19 pandemic brings so much impacts on the airline business as

the business cannot be done as usual. There seems to have a more severe and quick
waves on air traffic numbers as sudden escalations in flight cancellations, aircraft
groundings, travel bans and border closures are rapidly felt in lower load factors and
incomes for airlines, while airports lose non- aeronautical profits.

Therefore, this research paper is indeed important to investigate the effects of

COVID-19 pandemic and possible ways to reduce the impacts of COVID-19 on Air
Asia online business, so it will continue survive despite the pandemic.

e) Research questions
1. Why COVID-19 pandemic caused losses on Air Asia airline business?
2. What are the impacts of COVID-19 pandemic on Air Asia airline business based
on Berita Harian Online reportings?
3. How can we reduce the impacts of COVID-19 pandemic to the Air Asia airline
business?

4. Research objectives
1. To identify the causes brought by COVID-19 pandemic to the Air Asia airline
business’ losses.
2. To discuss about the impacts of COVID-19 pandemic on Air Asia airline business
based on Berita Harian Online reportings.
3. To investigate the possible ways to reduce the impacts of COVID-19 pandemic to
the Air Asia airline business.

Chapter 2
Literature Review
a) Literature review

Since its emergence, the 2019 coronavirus (COVID-19) pandemic as the latest
universal risk has messed up business operations in all industries. The airline industry is one
of the first industries that was affected from the occurrence because the disease is easily
transmitted among individuals. Until now, there is no authorised medical treatment for the

6
disease, causing a terrific panic for world nations. Therefore, governments around the sphere
have forbidden cross-country transportation. The market worth of the airline business has
shortened since then.

Sheikh Salahuddin Ahmed, on his review, The Coronavirus Disease 2019 (COVID-
19): A Review showed a lot of information of the appearance of 2019 novel coronavirus
infection such as its origin, spread, epidemiology, and complete spectrum of clinical illness,
treatment and mortality rate has not been noticeably distinct. This article concentrates the
epidemiological proofs, clinical manifestations, investigations and treatment delivered to the
known cases of the 2019 novel coronavirus pneumonia in numerous hospitals of Wuhan city
and other areas in China. Facts have been collected mostly from appropriate researches and
papers that were published in recent times. Clinical manifestations included fever, non-
productive cough, dyspnoea, myalgia, fatigue, radiographic manifestations of pneumonia and
exposure of the novel virus by RT-PCR method. Certain patients quickly developed acute
respiratory distress syndrome, severe respiratory failure, and other severe complications with
deadly outcomes. There are neither vaccines nor effective treatments for the illness caused by
the virus, but determinations are typically restrained to symptomatic and supportive
management. Antivirals and corticosteroids were utilized in serious illness but had no
effective result. The disease is more expected to happen in older people with comorbidities,
and may lead to serious and even deadly respiratory diseases. Until now there is no effective
specific therapy, but compassionate managements are arranged. Researches and trials
happening with investigational agents for the effective management of the disease5.

Coronavirus Diseases (COVID-19) Current Status and Future Perspectives: A

Narrative Review stated at the end of 2019, a severe acute respiratory syndrome coronavirus
2 (SARS-CoV-2), initiating severe acute respiratory syndrome stretched out internationally
from Wuhan, China. In March 2020, the World Health Organization confirmed the SARS-
Cov-2 virus a worldwide pandemic. Even though only when the pandemic ends it will be
possible to evaluate the full health, social and economic impact of this universal disaster, this
article signifies a picture of the recent state of the art. This article delivers a vision into the
COVID-19 present situation and represents a picture of the existing state of the art in terms of
public health impact, pathophysiology and clinical manifestations, diagnosis, case
management, emergency response and preparedness. There is a fast growing body of

5
Sheikh Salahuddin Ahmed, “The Coronavirus Disease 2019 (COVID-19): A Review”, Journal of Advances in
Medicine and Medical Research, 32(4): 1-9, (2020); Article no.JAMMR.55245, accessed on November 25, 2020.

7
literature on this issue and optimistically it will help in verdict an effective vaccine and the
best preparation for the management and treatment of symptomatic cases. Only when this
pandemic ends, individual will be able to assess the health, social and economic impact of
this universal disaster and people should be able to learn lessons especially in terms of public
and global health for any upcoming related pandemics6.

Research on COVID-19 infection: Origin, transmission, and characteristics of human

coronaviruses by Muhammad Adnan Shereen, Suliman Khan, Abeer Kazmi, Nadia Bashir,
and Rabeea Siddique specified that the coronavirus disease 19 (COVID-19) could be a highly
infectious and pathogenic viral infection affected by severe acute respiratory syndrome
coronavirus 2 (SARS-CoV-2), which developed in Wuhan, China and blow-out around the
sphere. Genomic study discovered that SARS-CoV-2 is phylogenetically associated with
severe acute respiratory syndrome-like (SARS-like) bat viruses, hence bats might be the
likely primary reservoir. The middle source of basis and transmission to human being is not
identified, but, the rapid human to human transfer has been established broadly. There is no
clinically agreed antiviral drug or vaccine accessible to be used against COVID-19. Though,
few broad-spectrum antiviral drugs have been estimated against COVID-19 in clinical trials,
lead in clinical recovery. In the current review, we summarize and comparatively examine the
occurrence and pathogenicity of COVID-19 infection and previous human coronaviruses
severe acute respiratory syndrome coronavirus (SARS-CoV) and Middle East respiratory
syndrome coronavirus (MERS-CoV). Human coronaviruses targeting vaccines and antiviral
drugs should be considered that could be used alongside the present as well as future
epidemics. There are many corporations working for the development of effective SARS-
CoV-2 vaccines, such as Moderna Therapeutics, Inovio Pharmaceuticals, Novavax, Vir
Biotechnology, Stermirna Therapeutics, Johnson & Johnson, VIDO-InterVac, GeoVax-
BravoVax, Clover Biopharmaceuticals, CureVac, and Codagenix. But there is an essential for
rapid human and animal-based tracks as these vaccines still need 3–10 months for
commercialization. Somebody who stricken by influenza or seasonal allergy can also reveal
temperature which may be spotted by thermo-scanners, therefore the person will become
suspected. Consequently, a precise and prompt diagnostic kit or meter for detection of SARS-

6
Francesco Di Gennaro, Damiano Pizzol, Claudia Marotta, Mario Antunes, Vincenzo Racalbuto, Nicola
Veronese and Lee Smith, “Coronavirus Diseases (COVID-19) Current Status and Future Perspectives: A
Narrative Review”, International Journal of Environmental Research and Public Health, 17, 2690, (2020),
accessed on November 25, 2020.

8
CoV-2 in suspected patients is compulsory, as the PCR based testing is costly and time
consuming7.

Other than that, Asita Elengoe on COVID-19 Outbreak in Malaysia thought that in
2020 a major threat to public health arose. The novel severe acute respiratory syndrome
coronavirus 2 (SARS-CoV-2) epidemic outbreak appeared in December 2019 from Wuhan
City, Hubei Province, China and binge to the rest of the world. This disease was called
COVID-19 by World Health Organization. Until 17th April 2020, there is a complete of
2,230,439 cases of COVID-19 which 150,810 cases of deceases and 564,210 improved health
cases are reported globally. The outbreak of COVID-19 from a Malaysian perspective and
mental state during the COVID-19 outbreak was explored. Until now, there is no vaccine or
no specific treatment for COVID-19, so precaution methods are vital to avoid and control the
prompt spread of the SARS-CoV-2 virus. Preparedness should be a significance for future
pandemic outbreaks. This COVID-19 pandemic outbreak remains to possess a resilient
impact on the economy, trade, and tourism industries. It has also affected sports activities
such as the 2020 squash’s Asian Team Championship, SUKMA Games, and the 2020
Summer Olympics was postponed until 2021. Many clinical trials are being carried out to
search out medicines and vaccines for COVID-19. Simultaneously, the knowledge gained
from the worldwide efforts in allocating with COVID-19, should drive countries globally to
be prepared for disease control for novel disease outbreaks, epidemics and pandemics of the
longer term8.

Written by Shohini Roy, Economic impact of covid-19 pandemic, the COVID-

19 pandemic happened when SARS-CoV2 virus spread among individuals in this sphere. An
extensive global shock generating a severe economic strike is formed by COVID-19
pandemic and there has been a strike in all economic sectors globally. A study shows that
more than one third of world population was located under lock-down due to this pandemic.
The recovery of economies in this world from the global pandemic and how long the
regaining efforts would take is still inexact since the end of the pandemic still cannot be seen.
It seems very hard to avoid a global economic collapse because of COVID-19 pandemic but
it is ambiguous as to how long the stagnation will last. The states in all over the world can

7
Muhammad Adnan Shereen, Suliman Khan, Abeer Kazmi, Nadia Bashir, Rabeea Siddique, “COVID-19
infection: Origin, transmission, and characteristics of human coronaviruses”, Journal of Advanced Research,
(2020): 91-98, accessed on November 23, 2020.
8
Asita Elengoe, “COVID-19 Outbreak in Malaysia”, Osong Public Health and Research Perspectives, (2020);
11(3):93-100, accessed on November 21, 2020.

9
fully mend from the pandemic is indeterminate. The retrieval procedures will call for
collaborative action of governments, policy-makers, healthcare professionals as well as the
common people. If publics do not tolerate by the social distancing policies outlined by the
government and policy makers, a smooth recovery will be impossible. Besides, there should
be more testing accommodations accessible to societies and they should have easy contact to
crucial commodities needed to fight the pandemic such as face masks and hand sanitizers.
Correspondingly, development of vaccine is vital for people to fight against the pandemic.
Many medical and pharmaceutical organizations are integrated in their effort to cultivate a
vaccine for coronavirus. Clover Biopharmaceuticals in China has started Phase 1 trials of
COVID-19 vaccine in association with its Australian subsidiary Clover Australia. The trials
have begun in Australia. The researchers at University of Oxford are working in partnership
with AstraZeneca to blast-off a vaccine for coronavirus. The COVID-19 pandemic has
produced a pervasive economic strike and has affected different sectors of the economy9.

Concerning on the impacts of COVID -19 on air transport, a journal on An early

assessment of the impact of COVID-19 on air transport: Just another crisis or the end of
aviation as we know it? by Pere Suau-Sancheza, Augusto Voltes-Dortac, and Natàlia
Cugueró-Escofet stated that beside with other sectors of the economy, air traffic is at risk to
external factors, such as oil crises, natural catastrophes, armed conflicts, terrorist assaults,
economic slumps and infection occurrences. These outside impacts seem to have a more
severe and quick waves on air traffic numbers as sudden escalations in flight cancellations,
aircraft groundings, travel bans and border closures are rapidly felt in lower load factors and
incomes for airlines, while airports lose non- aeronautical profits. The article have exposed
some severe long-term significances for the air transport supply. First, the crisis would lead to
consolidation and a knowingly minor business. Other than that, they were alarmed about the
possible changes in terms of state aid and how that could disturb the level playing field in a
post-Covid-19 aviation market. In terms of winning and losing airports, local and secondary
airports would be the big losers as capacity would be unrestricted in bigger markets, which
would appeal airlines. On the contrary, large airports put on a hub could reinforce their
leadership by attracting new airlines, which would protect traffic volumes but also take along
about a more modest and hostile marketplace. Experts were apprehensive about the recovery
of business travel, mainly due to the cancellation of MICE events, and the rough lift of travel
bans and reconnection of states to universal trade networks. Teleworking was seen as severe

9
Shohini Roy, “Economic impact of covid-19 pandemic”, MS (Finance), Purdue University, 2020.

10
threat to mandate, as the current framework of digital transformation and cloud applications
attempt enhanced solutions for teleworking than the traditional videoconference.
Alternatively, the recovery of the leisure passenger segment was expected to be faster, but
reduced disposable incomes would restrain propensity to fly and require important support,
probably in terms of route subsidies and marketing support, but also with direct request
stimulus. Finally, fear and health concerns were acknowledged as main issues for the leisure
traveller, more so than for the business traveller. As regards regulatory aspects, it is measured
that new health screening controls would be enforced at airports, translating in greater costs
for airports and passengers. But then again they did not think through social distancing as a
practical commercial decision for airlines. Environmental guideline was not estimated to be
calm and some saw state aid as a chance to carry out more environmental boundaries on
airline operations10.

Another writing that is strongly related to our case is The impacts of COVID-19 on
the global airline industry: An event study approach by Sakkakom Maneenop and Suntichai
Kotcharin. This article shows the immediate impact of the 2019 novel coronavirus (COVID-
19) outbreak on on the universal airline business. The outcomes prove that airline stock
returns decline more ominously than the market returns after three major COVID-19
statements were made. The results approve that traders in Western states are quick to respond
to recent information than the rest of the sphere. The outcomes call for instant policy plans in
order to lessen the impact of the pandemic in the airline industry around the world. It can be
understood that the government in each country is at an intersection—whether to arrange for
financial support or guarantee existing debt, or to be certain in market mechanisms and let the
airline firms file for bankruptcy. In order to help the airline industry, some alleviation
procedures may deal with mergers and acquisitions, tax policy, and government subsidies.
These procedures, of course, will increase the national debt. Or else, firm liquidation in the
airlines is, possibly, unavoidable and afterward will disturb the universal supply chain and
associated businesses11.

Mehta P on his article, Aviation During and Post Pandemic COVID-19 –

Impact and Strategies, aviation is the crucial part of transportation of any country which has
10
Pere Suau-Sancheza, Augusto Voltes-Dortac, Natàlia Cugueró-Escofet, “An early assessment of the impact of
COVID-19 on air transport: Just another crisis or the end of aviation as we know it?”, Journal of Transport
Geography, (2020), accessed on November 21, 2020.
11
Sakkakom Maneenop, Suntichai Kotcharin, “The impacts of COVID-19 on the global airline industry: An event
study approach”, Journal of Air Transport Management, Volume 89, (2020), accessed on November 21, 2020.

11
been now come to end because of the pandemic called COVID-19. Those airlines which are
the basis of fast transportation for travellers are now start to be blameable for transferring the
virus across the boundaries. In line for this, countries have highlighted the public health over
economic development and have paused their flying operations. On the other hand, many
countries have started some of its local flying operations to achieve the essential flying
resolutions of their people but that acquires only losses for them. Study has decided that
pandemic has violently impacted the aviation sector all around the sphere which is significant
for the growth of other sectors of economy.

Pandemic has altered the way of living, eating, working and so on travelling. This
change has triggered the airlines and airports to rearrange and restructure its flying operations
on the basis of sanitisation. For enduring in a short run, airlines and government have been
doing a small number of things, nevertheless, changed perception of passengers towards
travelling and unavailable cash reserves has turn into a threat for its long- term sustenance.
General, passengers are the strength of this sector and nurturing their willingness to travel
would be a perplexing task for the airlines. Societies are prepared with fear of transmission
which have made them doubtful about travelling. Therefore, aviation sector is essential by
complex approach based upon their powers and market opportunities. For this every force of
environment such as government, banks, airline owners, staff, passengers are necessary to
participate supportively. At this time, recovery speed of aviation is very slow but for future it
has been expected that it will bounce back with more power12.

On March, when the COVID-19 happened, it is written on the article Malaysia

Airlines, AirAsia potong gaji tangani kesan COVID-19, the country's two major airlines,
Malaysia Aviation Group (MAG) and AirAsia Bhd have been applying measures to lessen
staff salaries for several months in an effort to address the effects of COVID-19 which shakes
the company's revenue. A source from AirAsia Group said that the airline executed a salary
cutting measure concerning all its senior management. MAG Group Chief Executive Officer,
Captain Izham Ismail said that the move would not involve other staffs as AirAsia had taken
steps to curb costs throughout its business operations to reduce the impact on its employees.
The Group needs to implement these actions to ensure that our financial flows remain
sustainable and competitive. There are other flights that reduce higher costs involving the
entire staff. He said that this is the situation that airlines are currently facing not only in
12
Mehta P, “Aviation During and Post Pandemic COVID-19 – Impact and Strategies”, SF Journal of Aviation and
Aeronautical Science, (2020), accessed on November 21, 2020.

12
Malaysia but around the world following the impact brought by COVID-19. In the meantime,
AirAsia Group in a statement said, it assured that the measures to curb the costs implemented
across all its business operations will not have a direct or minimal impact on all its
employees, especially from those with low incomes13.

Consequently, on late March, Berita Harian Online wrote on the article COVID-19:
AirAsia dijangka rugi lebih RM1.1 bilion which Affin Hwang Capital predicts AirAsia
Group Bhd to report losses in excess of RM1.1 billion by 2020, after the airline certain to
suspend operations following the COVID-19 pandemic. AirAsia has recently suspended all
international and domestic flights operated by AirAsia Malaysia, from March 28 to April 21,
2020. Other airlines within the AirAsia Group will also lessen their respective flight
frequencies. Affin Hwang Capital in a note said the extreme move mirrored the relatively
poor operating environment, faced by the aviation industry. In line with that, the research
firm restated its 'sell' recommendation to AirAsia shares with a lower 12-month price target
of RM0.49. In the meantime, Philippines AirAsia, Thai AirAsia, PT Indonesia AirAsia and
AirAsia India have reduced their flight frequencies. He said that in order to manage and
address costs, AirAsia's management and senior staff voluntarily opt for salary cuts, either at
a rate of 100 percent or up to 15 percent. In addition, for the resolution of addressing costs,
Affin Hwang Capital supposes AirAsia to consult with its suppliers to reduce operating costs,
such as lease operations, airport charges, fuel, operating costs and maintenance. They now
predict that AirAsia will report greater losses in 2020-2021 after taking into account the fall
in revenue due to temporary suspension of flights and relatively difficult industrial prospects,
and after including efforts to save on personnel costs, lease operations, fuel and operations as
well as maintenance expenses14.

Mohd Zaky Zainuddin on AirAsia X catat prestasi kurang memberangsangkan stated

AirAsia X which operates aircraft with single class cabin but premium and economy class
seating also recorded poor performance in the first quarter of this year, as a result of COVID-
19. AirAsia Group's long-haul flight unit in a statement said AirAsia X recorded a passenger
load factor of 74 per cent in the first quarter of this year, down nine percentage points year-
13
Hazwan Faisal Mohamad and Al-Zahrin Alias, Malaysia Airlines, AirAsia potong gaji tangani kesan COVID-19,
Berita Harian Online, March 10, 2020, accessed on November 15, 2020,
https://www.bharian.com.my/bisnes/lain-lain/2020/03/663966/malaysia-airlines-airasia-potong-gaji-tangani-
kesan-covid-19
14
Berita Harian Online, COVID-19: AirAsia dijangka rugi lebih RM1.1 bilion, March 27, 2020, accessed on
November 15, 2020, https://www.bharian.com.my/bisnes/korporat/2020/03/669779/covid-19-airasia-
dijangka-rugi-lebih-rm11-bilion

13
on-year. During the quarter under review, the number of passengers declined 25 per cent
year-on-year to 1,141,713 people, while seating capacity per kilometer declined by 21 per
cent year-on-year to 6,874 million. He said that the sharp drop in available and passenger
capacity is due to the impact of COVID-19 affecting global travel demand and as part of the
problem-solving strategy, the company reduced flight frequency across the network and
suspended several routes. Last February where the COVID-19 spread began, AirAsia X
Malaysia implemented capacity management by reducing the frequency of flights to China
after travel restrictions were tightened and demand also weakened. The following month,
capacity management was implemented in almost 90 per cent of the company's network
including Australia, Japan, South Korea and India. A statement stated a total of four routes
were terminated in March, namely Tianjin, Wuhan, Lanzhou and Jaipur. In an effort to
manage the adverse effects of the outbreak and reduce operating costs, AirAsia X Malaysia
announced a temporary hibernation of its entire fleet and postponed all operations scheduled
for a period of two months effective March 28. The size of the AirAsia X Malaysia fleet
remained at 24 units of A330 aircraft as of the end of March15.

On April 4, Mohd Zaky Zainuddin reported on Berita Harian Online that low-
cost carrier AirAsia Group Bhd and rail service provider Express Rail Link Sdn Bhd (ERL)
have suspended their services following the spread of COVID-19 and the implementation of
the Movement Control Order (MCO). However, the national carrier, Malaysia Airlines is still
operating but in minimal capacity. AirAsia Group Bhd stated that the group suspended its
subsidiary flight operations between March 16 and next June. He said that the spread of the
COVID-19 pandemic resulted in travel restrictions by several countries and AirAsia Group
will implement a temporary suspension for almost all flights in its network. Through the
announcement, its subsidiary for short-haul flights, AirAsia Malaysia (AK), temporarily
suspends all international and domestic flights from March 28 to April 21. For AirAsia
Philippines (Z2), the temporary suspension of all flights from March 20 to April 14, while
AirAsia Thailand (FD) suspends all international flights from March 22 to April 25, while
domestic from April 1 to April 30. AirAsia Indonesia (QZ) temporarily suspends all
international flights from April 1 to May 17, while domestic flights from April 1 to April 21.
For AirAsia India (I5), the suspension of all flights starts March 25 for a period of 21 days

15
Mohd Zaky Zainuddin, AirAsia X catat prestasi kurang memberangsangkan, Berita Harian Online, April 28,
2020, accessed on November 15, 2020,
https://www.bharian.com.my/bisnes/korporat/2020/04/682701/airasia-x-catat-prestasi-kurang-
memberangsangkan

14
following the Indian government's move to suspend all domestic flights. For medium and
long distance flights, AirAsia X via AirAsia X Malaysia (D7) temporarily suspends almost all
flights from March 28 to May 31, while AirAsia X Thailand (XJ) suspends all flights from
March 16 for a period of three months. He believes AirAsia will continue to prioritize the
safety and well-being of customers and staff. As such, AirAsia play a role in assisting
government efforts that impose travel restrictions and movement control orders including
home quarantine orders to prevent the spread of the virus and make flights safer for all. They
will continue to monitor the current situation and be ready to start our flight as soon as
possible when the situation improves and subject to approval from the regulators16.

From the article AirAsia hilang pendapatan, 96 peratus pesawat tidak beroperasi, it
can be seen that the pandemic caused AirAsia Group Bhd to reveal that 96 per cent of its
aircraft fleet could not operate during the Movement Control Order (MCO) period following
the spread of COVID-19. Co-founder and CEO of AirAsia Group, Tan Sri Tony Fernandes,
thought the situation saw the low-cost carrier earning no income. Even so, he believed,
AirAsia still has financial commitments such as paying fuel suppliers and leasing. The staffs
receive a temporary salary reduction of between 15 to 75 percent depending on the length of
service to share the impact that AirAsia has to bear. Fernandes stated that he and AirAsia
Group Chairman, Datuk Kamarudin Meranun will also discard their payment of salaries
during this period. He also explained that the aviation industry was severely affected by
COVID-19 and AirAsia was no exception to the effects of the health crisis. He said the low-
cost carrier was working to reduce costs to deal with the crisis before returning to offer
services to customers and they are one of the few airlines in the world that will continue to
take care of our staff. He also stated that AirAsia is like a family and there are tens of
thousands who depend on this business to earn a living for the well-being of their family.

In late March, the International Air Transport Association (IATA) expects the
passenger aviation industry to lose revenue of US $ 252 billion (RM1.1 trillion) or four
percent below last year's figure. According to IATA, the reduction in revenue is due to
worsening travel restrictions and expectations of a global recession. IATA is reviewing the
analysis of the impact of revenue due to COVID-19 on the global air transport industry17.

16
Mohd Zaky Zainuddin, COVID-19: AirAsia, ERL gantung perkhidmatan, Malaysia Airlines masih beroperasi,
Berita Harian Online, April 4, 2020, accessed on November 15, 2020,
https://www.bharian.com.my/bisnes/lain-lain/2020/04/672930/covid-19-airasia-erl-gantung-perkhidmatan-
malaysia-airlines-masih

15
 Berita Harian wrote another impact of COVID-19 for AirAsia airline which AirAsia
Group is implementing a new travel policy for its passengers following the COVID-19
pandemic. This includes requiring passengers to bring and wear their own face masks before,
during and after the flight, as well as during check-in and luggage. Chief Security Officer
Captain Ling Liong Tien in a statement on AirAsia website said passengers without face
masks will not be allowed to board the plane. AirAsia also revised the cabin luggage policy
to facilitate social imprisonment, especially when boarding and landing, allowing only one
cabin luggage not exceeding seven kilograms per passenger. Liong Tien said the move would
help reduce unwanted contact between passengers and other passengers' luggage and vice
versa. There are also temperature checks at different checkpoints, including entrances and all
crews will be required to undergo temperature checks after each shift. The social
imprisonment needs to be monitored and there will be markers on the floor in the area for
queuing, including check-in counters and kiosks. Another security measure is the alternative
check-in counter to ensure adequate distance, in fact they are also working to have a
contactless contact process. Liong Tien said cabin crew would be required to wear protective
equipment on board, including face masks and gloves. He said production staff would be
monitored in accordance with COVID-19 guidelines and cabin crews handling menu items
would be required to wear disposable gloves. Furthermore, the cabin crew has been trained
with procedures for managing patients or passengers who are suspected of being unwell on
board. He stated that safety is the most important component of the aviation industry, and
they will certainly continue to work to ensure that this important connectivity meets all the
necessary health and safety standards for their employees and passengers18.

Mohd Zaky Zainuddin wrote on the article AirAsia sambung semula penerbangan
hujung bulan ini, AirAsia will resume selected domestic flights scheduled as early as April
29 subject to the approval of the country's government and flights to international
destinations will be resumed in stages, when the situation improves and until the travel
restrictions are lifted by the government. AirAsia Group President (Airlines) Bo Lingam said
AirAsia was updating customer handling procedures thoroughly from departure to in-flight

17
Mohd Zaky Zainuddin, COVID-19: AirAsia hilang pendapatan, 96 peratus pesawat tidak beroperasi, Berita
Harian Online, April 13, 2020, accessed on November 15, 2020,
https://www.bharian.com.my/bisnes/korporat/2020/04/676549/covid-19-airasia-hilang-pendapatan-96-
peratus-pesawat-tidak
18
Berita Harian Online, AirAsia laksana dasar perjalanan baharu, April 27, 2020, accessed on November 15,
2020, https://www.bharian.com.my/bisnes/korporat/2020/04/682285/airasia-laksana-dasar-perjalanan-
baharu

16
following the COVID-19 pandemic. He said the company was working closely with airport
authorities to ensure that all the recommended preventive measures were taken to ensure safe
and comfortable travel for all and they are pleased to resume their flights and services to
customers starting with domestic routes and look forward to fully operational as soon as
possible. Bo Lingam said AirAsia prioritizes the safety and well-being of their customers and
staff. As such, they are actively working with all regulators, local governments, civil aviation
and health authorities. They are also adhere to guidelines from the World Health
Organization (WHO) and the International Civil Aviation Organization (ICAO) to ensure the
highest standards on every flight. Bo said customers were also advised to adopt universally
recommended protection measures including wearing face masks, social imprisonment and
maintaining personal hygiene. He reminded the customers to check the Travel Advice issued
by AirAsia on airasia.com and social media platforms. They are also encouraged to check
their flight status at airasia.com/flightstatus for the latest live information due to the ever-
changing situation at the moment19.

On April 29, Mohd Zaky Zainuddin updated his report on the AirAsia’s domestic
flights in his article, AirAsia mula semula penerbangan domestik hari ini, AirAsia resumed
domestic flights starting in Malaysia April 29, followed by several other countries in
Southeast Asia. The low-cost carrier said the flight extension would be followed by Thailand
on May 1, the Philippines (May 16, 2020) and Indonesia (May 7, 2020), subject to approval
by the government of the country in which it operates. These services follow the rules of the
authorities with strict health controls and adopt social imprisonment protocols. It is said that
the resumption of these flights is for selected domestic routes, while flights to international
destinations will be resumed in stages, as conditions improve and until travel restrictions are
lifted by the government. Its Group Executive Chairman, Datuk Kamarudin Meranun, said
AirAsia was actively working with all regulators, local governments, civil aviation and health
authorities. He said the company also complied with guidelines from the World Health
Organization (WHO) and the International Civil Aviation Organization (ICAO) to ensure the
highest standards on every flight. AirAsia advised guests to wear face masks and practice
universally recommended protective measures including social imprisonment and
maintaining personal hygiene at the highest level. He said that all of their aircraft are

19
Mohd Zaky Zainuddin, AirAsia sambung semula penerbangan hujung bulan ini, Berita Harian Online, April 17,
2020, accessed on November 15, 2020,
https://www.bharian.com.my/bisnes/korporat/2020/04/678306/airasia-sambung-semula-penerbangan-
hujung-bulan-ini

17
equipped with High Efficiency Air Filter (HEPA) and will undergo a thorough disinfection
procedure after each flight20.

Rafidah Mat Ruzki and Mohd Anwar Patho Rohman on COVID-19: AirAsia tak
dibenar bawa masuk warga asing, the government still remains with the policy of not
allowing international people to enter Malaysia, including by air. Senior Minister (Security),
Datuk Seri Ismail Sabri Yaakob, said flight services including AirAsia were only allowed to
bring in Malaysian citizens because we are still on the policy that international people are not
allowed to enter our country. He stated that all AirAsia can bring in is Malaysian citizens. If
they enter, they will be instructed to undergo mandatory quarantine for 14 days. He said at a
daily press conference after the Special Meeting of Ministers on the Implementation of the
Movement Control Order that AirAsia needs to comply with the government's instructions21.

On May 13, as stated on Berita Harian Online, low-cost carrier AirAsia Bhd is
studying the possible increase in fares in the future following the implementation of the
Conditional Movement Control Order. Its chairman, Datuk Kamarudin Meranun, said at
present, the company was still in discussions on whether there was an urgent need for
AirAsia to increase its fares in the future. If there is fare increase, it will not be noticeable.
Currently, he told that they do not know exactly how much the fare increase (if any) because
the number of AirAsia aircraft allowed to operate during this PKPB still not known.
Kamarudin said the increase in airfare was subject to cost and AirAsia would try its best not
to increase it so as not to burden passengers. Their intention to resume flights to ensure the
company's operations continue and not for profit, as in the current challenging situation, it is
difficult for airlines to make a profit. However, as long as they can fund management costs
such as maintenance costs and so on, that is enough. He said the airline's operations were
subject to government directives and every planning that was drafted had to be in line with
the decisions and announcements made by the government, especially during the MCO

20
Mohd Zaky Zainuddin, AirAsia mula semula penerbangan domestik hari ini, Berita Harian Online, April 29,
2020, accessed on November 17, 2020,
https://www.bharian.com.my/bisnes/korporat/2020/04/683156/airasia-mula-semula-penerbangan-domestik-
hari-ini
21
Rafidah Mat Ruzki and Mohd Anwar Patho Rohman, COVID-19: AirAsia tak dibenar bawa masuk warga asing,
Berita Harian Online, May 6, 2020, accessed on November 17, 2020,
https://www.bharian.com.my/berita/nasional/2020/05/685804/covid-19-airasia-tak-dibenar-bawa-masuk-
warga-asing

18
period. Therefore, when they have made a plan and the announcement made by the
government is not in line with the plan, they have to change the plan22.

Due to the COVID-19 pandemic, more than 300 AirAsia Bhd employees will be
terminated by the low-cost carrier in an effort to reduce operations following a difficult
situation due to the COVID-19 outbreak in June 2020. Citing media reports, the resignation
announced by Chief Executive Officer (CEO) Riad Asmat is expected to involve 111 cabin
crew from 1,900 crew, 172 pilots and 50 engineers. According to the report, all those who
will be involved in the layoff scheme will be notified via email within 24 hours. AirAsia also
promises compensation to all those involved. Apart from not having various options in
ensuring AirAsia continues to operate as before, Riad said the restructuring of the
organization is seen as an alternative that can be taken at this time because the current
situation is very difficult23.

From Berita Harian Online report on June 13, low-cost carrier, AirAsia Bhd, received
the government's choice not to make social imprisonment mandatory on flights. Its chief
executive officer, Riad Asmat, said according to the International Air Transport Association
(IATA), the evidence exposed the risk of infection in aircraft was very low. He said that the
aircraft has been furnished with features that can lessen the threat of infection in the aircraft
such as High Efficiency Particle Air (HEPA) filters that keep the air in the aircraft fresh and
the level of sanitation is correspondent to the air quality in the operating room at the hospital.
He said AirAsia also cheered the reopening of domestic travel following the latest
announcement of the Recovery Movement Control Order and incentives such as RM1,000
income tax relief for domestic tourism expenditure until December 2021. Adhering to their
slogan, 'Now Everyone Can Fly', they wholeheartedly support the government's
determinations by launching an Unlimited Pass to encourage and recover Malaysia's domestic
tourism. On June 7, the Prime Minister, Tan Sri Muhyiddin Yassin, declared a number of
permits that were permissible to the people under the Recovery Movement Control Order,
including cross-country travel from June 10. After that, AirAsia propelled the Malaysian
Holiday Unlimited Without Pass to encourage and regenerate Malaysia's domestic tourism to

22
Berita Harian Online, AirAsia pertimbang naikkan harga tambang, May 13, 2020, accessed on November 17,
2020, https://www.bharian.com.my/bisnes/korporat/2020/05/688380/airasia-pertimbang-naikkan-harga-
tambang
23
Berita Harian Online, AirAsia tamatkan perkhidmatan 300 pekerja, June 4, 2020, accessed on November 17,
2020, https://www.bharian.com.my/bisnes/korporat/2020/06/696456/airasia-tamatkan-perkhidmatan-300-
pekerja

19
upkeep the government's efforts. The RM399 net worth pass is offered for all Malaysia-based
AirAsia BIG members to obtain at airasia.com/deals or through the AirAsia mobile app
(under the Offers Tab) from June 11 to June 15, 2020. Pass holders can redeem unlimited
travel for the local travel period June 25, 2020 to March 31, 2021. In the event of a change in
travel plans, enhanced flexibility is also delivered for customers traveling until 31 December
2020 by setting aside flight exchange costs24.

Other than that, Mohd Zaky Zainuddin on AirAsia harap pembukaan laluan
antarabangsa pacu semula pendapatan stated on June, AirAsia hopes that the reopening of
regional-level international airlines including China, Singapore, Thailand and South Korea
and Japan, which is expected to start next month, will help Asia's largest low-cost carrier
return to more stable revenue. AirAsia Group Bhd chief executive officer Tan Sri Tony
Fernandes said with China expected to be the first route opened for international flights, it
was expected to provide injections to AirAsia, which was severely affected by COVID-19.
They would like to emphasize that, AirAsia conducts comprehensive tests to ensure their
flights are safe. Fernandes stated that the flights with the standard operating procedures and
procedures (SOPs) they have taken, none of their cabin crew have been infected with
COVID-19 to date in several destinations. Commenting further, Fernandes said, after three
months without revenue, AirAsia began to gain sales following the full opening of domestic
routes in several countries including Malaysia, Thailand and the Philippines, while Indonesia
will open soon. He encouraged the people to get to know their respective countries, while
waiting for international channels to open. Following air travel restrictions, he said, AirAsia
had to take a difficult step by releasing some of its staff who had long served with the
airline25.

Furthermore, Mahanum Abdul Aziz wrote in her article AirAsia Group Bhd, which is
currently operating at full capacity, plans to add more flights this July in line with the
increasing demand for air travel. Its chief executive officer, Tan Sri Tony Fernandes, said the
demand for air travel increased due to the implementation of the Restoration Movement
Control Order which allowed cross-country travel. He said the addition of flights would be
24
Berita Harian Online, Risiko jangkitan dalam pesawat amat rendah – AirAsia, June 13, 2020, accessed on
November 26, 2020, https://www.bharian.com.my/berita/nasional/2020/06/699853/risiko-jangkitan-dalam-
pesawat-amat-rendah-airasia
25
Mohd Zaky Zainuddin, AirAsia harap pembukaan laluan antarabangsa pacu semula pendapatan, Berita
Harian Online, June 14, 2020, accessed on November 21, 2020,
https://www.bharian.com.my/bisnes/korporat/2020/06/700296/airasia-harap-pembukaan-laluan-
antarabangsa-pacu-semula-pendapatan

20
made based on demand in line with the relaxation of movement controls to curb the spread of
COVID-19 in the country. He said that they follow the guidelines from the government. They
operate at full capacity and will increase flights when there is a demand for it26.

Even when the flights are still operating in COVID-19 pandemic, the impact is still
big as the group of airlines to record a net loss of RM803.85 million in the first quarter ended
March 31, 2020, compared to a net profit of RM96.09 million in the same quarter last year.
Revenue declined to RM2.31 billion from RM2.73 billion previously. AirAsia told that the
concerns about the spread of the virus, as well as travel restrictions and border controls
announced by governments across the country, have led to declining demand for air travel in
February and March 2020. While the aviation industry faces significant challenges, with
proactive capacity and cost management, in addition to strong performance from non-airline
businesses, AirAsia Group recorded a pre-interest income, tax, depreciation and amortization
(EBITDA) earnings. For the airline business, the group's total turnover in the first quarter of
2020 decreased 18 per cent to RM2.16 billion year-on-year with increasing and
unprecedented travel restrictions following COVID-1927.

On July 26, it is reported that the domestic travel and the domestic tourism industry
are on the rise again, enabling a slight recovery to low-cost carrier, AirAsia. AirAsia.com
CEO Karen Chan said while travel may be difficult, the airline will step up efforts to attract
more customers as well as restructure its business priorities from travel to businesses related
to local consumption. Since the outbreak of the pandemic, AirAsia has launched businesses
such as Ourshop, an e-commerce marketplace; Ourfarm, an e-commerce platform to help
connect farmers directly with businesses; and Ourfood, a seamless and affordable solution for
customers and restaurant owners. Based on the new reality we face, AirAsia.com's priority is
to maintain the growth path in a sluggish economic environment28.

Alzahrin Alias on Tiada penerbangan antarabangsa hingga akhir tahun - AirAsia

Group, AirAsia Group Bhd expects no international travel to be carried out by the airline
26
Mahanum Abdul Aziz, Permintaan tinggi, AirAsia tambah penerbangan pada Julai, Berita Harian Online, June
16, 2020, accessed on November 21, 2020,
https://www.bharian.com.my/bisnes/pasaran/2020/06/700817/permintaan-tinggi-airasia-tambah-
penerbangan-pada-julai
27
Berita Harian Online, COVID-19 sebabkan AirAsia rugi RM803.85 juta, July 8, 2020, accessed on November
21, 2020, https://www.bharian.com.my/bisnes/korporat/2020/07/708566/covid-19-sebabkan-airasia-rugi-
rm80385-juta
28
Berita Harian Online, Operasi AirAsia semakin pulih, July 26, 2020, accessed on November 21, 2020,
https://www.bharian.com.my/bisnes/korporat/2020/07/714996/operasi-airasia-semakin-pulih

21
until this year due to the spread of the COVID-19 pandemic. AirAsia Group Chief Executive
Officer, Tan Sri Tony Fernandes, said the impact of the pandemic would be prolonged and
possibly take time to recover thus reopening air travel to normal situations. He said the
AirAsia group was also ready to face a difficult situation if the borders of most countries in
the world were still not open until the end of this year. They are ready if no air travel can be
done this year but AirAsia hopes that this global health and economic crisis will recover as
soon as possible and will not last until December 2020. Fernandes stated that they are always
optimistic in the AirAsia business but need more even though domestic flights are already
open. On whether AirAsia would further downsize its business operations if the situation
worsened and international air travel remained unmanageable, Fernandes said he hoped it
would not happen. He said, however, many factors need to be considered and the group took
the approach to wait and see first before any implementation is carried out. He said the only
concern at this time for all businesses is if there is a second and third wave of the COVID-19
pandemic. Tony also hoped that the leaders of ASEAN countries with green zones would be
bolder and reopen their borders for the sake of regional economic growth29.

Other than that, Alzahrin Alias wrote another report that the aviation sector is
expected to recover in the near future after facing an unprecedented fall due to the COVID-19
pandemic, said AirAsia Group Bhd Chief Executive Officer Tan Sri Tony Fernandes. He said
like other crises that had hit the aviation sector before, it never lasted and recovered in a short
period of time. Clearly, the discovery of the COVID-19 pandemic vaccine and the
commercialization of the vaccine are among the key factors that will again increase passenger
confidence and the opening of national borders. The aviation sector is always facing a crisis.
As was the case with the 9/11 crisis, at that time the aviation sector also recorded a significant
decline. However, it did not last long, just like it is currently experiencing. Therefore,
AirAsia is optimistic that the aviation sector will return to normal in the near future.
Furthermore, the closure of national borders around the world will not last long. It needs to be
reopened for the recovery of the world economy. Tony said AirAsia was still focused on its
aviation business despite the constraints due to the lack of international travel. Therefore,
AirAsia, he said, would strengthen domestic flights in countries with the company's presence
such as Malaysia, Indonesia, Thailand, the Philippines, India and Japan. Domestic aviation is

29
Alzahrin Alias, Tiada penerbangan antarabangsa hingga akhir tahun - AirAsia Group, Berita Harian Online,
August 27, 2020, accessed on November 21, 2020,
https://www.bharian.com.my/bisnes/korporat/2020/08/725331/tiada-penerbangan-antarabangsa-hingga-
akhir-tahun-airasia-group

22
currently in high demand and this gives the impression that the aviation sector is still trusted
in terms of safety and hygiene," he said, adding that the company also hoped that ASEAN
leaders would review border closures and return air travel as soon as possible30.

It is written on Berita Harian Online that COVID-19 pandemic affected AirAsia

Group Bhd (AirAsia) because total passengers dropped by 85 per cent to 1.91 million in the
third quarter of 2020 from 13 million in the same quarter last year. Despite the COVID-19
pandemic, AirAsia's load factor decreased by 18 percentage points year-on-year to 66
percent, the low-cost carrier said in a statement. For the monthly period, its main operating
metrics increased in September compared to July with a higher number of passengers in its
operations in Malaysia, India and Thailand, increasing by 36 per cent, 79 per cent and 65 per
cent respectively. It said the load factor for the group increased 7.0 ppts in September
compared to July. AirAsia Malaysia operates at 52 per cent of its domestic capacity in
September compared to 40 per cent in July as travel demand has been on an upward route
since the second quarter due to easing of interstate travel. AirAsia Malaysia reached a load
factor of 68 percent with almost 1.8 million passengers in the quarter. Although capacity was
reduced in October following a government-imposed Movement Control Order, AirAsia is
working to recover to 60 per cent in the fourth quarter just like the period before the
transmission of COVID-19 in domestic capacity31.

On October 9, it is reported on AirAsia, AirAsia X tamatkan khidmat lebih 2,000

pekerja that AirAsia Bhd and AirAsia X Bhd have confirmed that the low-cost carrier had to
lay off 10 per cent of its total 24,000 workforce last week. Speaking during an interview
session on TV3's Buletin Utama news program, AirAsia Group Chief Executive Officer, Tan
Sri Tony Fernandes, said the cost-cutting move had to be taken due to the reality of the
aviation sector which is difficult to recover in the near future. He said the airline would
operate on a smaller scale after this and AirAsia would work to save as many staff as
possible. They are very motivated to win because they are very motivated to take the staffs

30
Alzahrin Alias, Sektor penerbangan mampu pulih: Tony Fernandes, Berita Harian Online, September 18,
2020, accessed on November 23, 2020,
https://www.bharian.com.my/bisnes/korporat/2020/09/732792/sektor-penerbangan-mampu-pulih-tony-
fernandes
31
Berita Harian Online, Penumpang AirAsia susut 85 peratus dalam suku ketiga tahun ini, October 26, 2020,
accessed on November 23, 2020,
https://www.bharian.com.my/bisnes/korporat/2020/10/746562/penumpang-airasia-susut-85-peratus-dalam-
suku-ketiga-tahun-ini

23
back to work and provide as many jobs as they can provide because their great employees did
nothing wrong32.

Alzahrin Alias stated on his report, AirAsia dapat pinjaman kerajaan RM1 bilion,
AirAsia Group Bhd received an injection of funds through a loan of RM1 billion from the
government to help the airline recover from the collapse due to the COVID-19 pandemic.
Citing a report by Nikkei Asia, based on ministry and airline sources, the government is said
to have already approved the loan. The loan will be given by several local banks under a
government scheme to help the company deal with the outbreak and will be guaranteed 80
per cent by the Ministry of Finance (MoF). The RM1 billion is considered very important for
AirAsia, to be used for the payment of short-term loans and working capital funds. AirAsia
was previously reported to be implementing layoffs on November if its financial situation
continues to decline, after reducing its workforce by more than 10 per cent and planning to
reduce the number of aircraft. In an interview with the Nikkei last July, AirAsia Group CEO
Tan Sri Tony Fernandes revealed that the airline needs to raise RM2 billion over the next six
months to be in a comfortable position. Sources said the government initially offered a loan
of RM500 million but eventually increased the loan in line with AirAsia's request. The
scheme was introduced by the Prime Minister, Tan Sri Muhyiddin Yassin to provide financial
assistance to companies receiving the COVID-19 pandemic impact. Government guarantees
are for the first five years of the financing period.

For the first six months of 2020, AirAsia recorded a net loss of RM1.8 billion while
revenue fell more than half to RM2.43 billion from RM5.65 billion in the same period last
year. The MoF previously in several reports stated that it would not provide assistance to
national carrier Malaysia Airlines Bhd. The airline, which has faced declining operations and
finances since the twin air disasters in 2014, received a US $ 1.5 billion injection that year for
a five-year recovery plan, but has so far rejected any direct financial assistance from the
government33.

Last but not least, Izwan Abdullah stated in the article Bekas KM minta hentikan
pinjaman SDB kepada AirAsia, the impact of COVID-19 on AirAsia airlines which is the
32
Berita Harian Online, AirAsia, AirAsia X tamatkan khidmat lebih 2,000 pekerja, October 9, 2020, accessed on
November 25, 2020, https://www.bharian.com.my/bisnes/korporat/2020/10/740263/airasia-airasia-x-
tamatkan-khidmat-lebih-2000-pekerja
33
Alzahrin Alias, AirAsia dapat pinjaman kerajaan RM1 bilion, Berita Harian Online, October 13, 2020, accessed
on November 25, 2020, https://www.bharian.com.my/bisnes/korporat/2020/10/741358/airasia-dapat-
pinjaman-kerajaan-rm1-bilion

24
Sabah government has been commended to stop the RM300 million loan accepted by its
subsidiary, Bank Pembangunan Sabah (SDB) to AirAsia. Sabah Progressive Party (SAPP)
president, Datuk Yong Teck Lee thought the move was essential as loans to the airline were
uncertain. He said SDB should only fund projects in Sabah in line with the command given to
it. He thought that the aviation industry is not something that SDB should bear during the
COVID-19 pandemic. Any bank officer and operator knows what the crisis facing the
aviation industry is. The former Sabah Chief Minister was pointing out on a report that said
AirAsia had obtained an SDB loan to finance the operation of the low-cost carrier. The matter
was also confirmed by AirAsia and it is said to target to surge the company's logistics
existence in Sabah, thus creating more than 100,000 new jobs. Teck Lee, who is also the
Appointed State Assemblyman (ADUN), said based on national and international news
reports, SDB permitted a RM300 million loan to AirAsia to make sure it endures the COVID-
19 pandemic. AirAsia is stated to be nurturing RM2.5 billion by the end of the year. AirAsia
X Bhd proposed debt restructuring and a share capital cut of RM63.5 billion to evade
liquidation. Teck Lee said the RM300 million loan did not mean much to AirAsia related to
its RM66 billion debt and he wondered how can the RM300 million small SDB fund help
AirAsia continue to survive. RM300 million is only 4.5 percent of AirAsia's debt exposure.
In contrast, RM300 million can benefit a lot in stimulating the Sabah economy by giving
loans to the housing or agriculture or construction sectors in Sabah. He hoped AirAsia and
Malaysia Airlines can remain to serve the nation but for Sabah and SDB it is not to take the
risk of very inadequate funds to keep AirAsia submerged. He said, if there is help needed to
make sure AirAsia and Malaysia Airlines stay afloat, it is the responsibility of the Federal
government34.

b) Conceptual framework

34
Izwan Abdullah, Bekas KM minta hentikan pinjaman SDB kepada AirAsia, Berita Harian Online, October 24,
2020, accessed on November 26, 2020, https://www.bharian.com.my/berita/nasional/2020/10/745566/bekas-
km-minta-hentikan-pinjaman-sdb-kepada-airasia

25
Chapter 3

Method

This research paper is using a qualitative method which is primarily based on the
reports, articles, online websites and journals to examine cases related to Air Asia airline
business in dealing with COVID-19 pandemic. The limitations on this research paper is on
the causes brought by COVID-19 pandemic to the Air Asian airline business’ losses and also
made data collection about the impacts of COVID-19 pandemic to the airline’s business that
mostly were carried out through online websites from Berita Harian Online as well as online
research on scientific studies. The researcher also investigate the possible ways to reduce the
impacts of the pandemic on Air Asia airline’s business.

Chapter 4

Results and Discussion

By analysing the causes brought by COVID-19 to Air Asia airline’s business, the
business got down because of the big amount of cancellation flight happened during this
pandemic. The customers cannot proceed their flights because of the restrictions made by
government in order to protect Malaysians and international people from having flight

26
cluster. The flight operation that has been suspended made Air Asia lost a big amount of
money and this affected their economy.

The process of analysing the impacts of COVID-19 on Air Asia airline’s business on
Berita Harian Online revealed that Air Asia airline faced with losses in excess of RM1.1
billion by 2020, after the airline certain to suspend operations following the COVID-19
pandemic. AirAsia has recently suspended all international and domestic flights operated by
AirAsia Malaysia, from March 28 to April 21, 2020 35. For the first six months of 2020,
AirAsia recorded a net loss of RM1.8 billion while revenue fell more than half to RM2.43
billion from RM5.65 billion in the same period last year. The losses is mainly because the
amount of flights per day being reduced due to the pandemic and international people is not
allowed to enter Malaysia. The government only allowed to bring in Malaysian citizens and
they will be instructed to undergo mandatory quarantine for 14 days 36. A total of passengers
dropped by 85 per cent to 1.91 million in the third quarter of 2020 from 13 million in the
same quarter last year. Despite the COVID-19 pandemic, AirAsia's load factor decreased by
18 percentage points year-on-year to 66 percent, the low-cost carrier said in a statement. For
the monthly period, its main operating metrics increased in September compared to July with
a higher number of passengers in its operations in Malaysia, India and Thailand, increasing
by 36 per cent, 79 per cent and 65 per cent respectively. It said the load factor for the group
increased 7.0 ppts in September compared to July. AirAsia Malaysia operates at 52 per cent
of its domestic capacity in September compared to 40 per cent in July as travel demand has
been on an upward route since the second quarter due to easing of interstate travel. AirAsia
Malaysia reached a load factor of 68 percent with almost 1.8 million passengers in the
quarter. Although capacity was reduced in October following a government-imposed
Movement Control Order, AirAsia is working to recover to 60 per cent in the fourth quarter
just like the period before the transmission of COVID-19 in domestic capacity37.

Other than that, the payment of their staffs’ salaries got discarded depending on the
length of their service during this period to share the impact that Air Asia has to bear. There

35
Berita Harian Online, COVID-19: AirAsia dijangka rugi lebih RM1.1 bilion, March 27, 2020, accessed on
November 15, 2020, https://www.bharian.com.my/bisnes/korporat/2020/03/669779/covid-19-airasia-
dijangka-rugi-lebih-rm11-bilion
36
Rafidah Mat Ruzki and Mohd Anwar Patho Rohman, COVID-19: AirAsia tak dibenar bawa masuk warga asing,
Berita Harian Online, May 6, 2020, accessed on November 17, 2020,
https://www.bharian.com.my/berita/nasional/2020/05/685804/covid-19-airasia-tak-dibenar-bawa-masuk-
warga-asing
37
Berita Harian Online, Penumpang AirAsia susut 85 peratus dalam suku ketiga tahun ini, October 26, 2020,
accessed on November 23, 2020.

27
are also more than 300 AirAsia Bhd employees will be terminated by the low-cost carrier in
an effort to reduce operations following a difficult situation due to the COVID-19 outbreak in
June 2020. Citing media reports, the resignation announced by Chief Executive Officer
(CEO) Riad Asmat is expected to involve 111 cabin crew from 1,900 crew, 172 pilots and 50
engineers. According to the report, all those who will be involved in the layoff scheme will
be notified via email within 24 hours. AirAsia also promises compensation to all those
involved. Apart from not having various options in ensuring AirAsia continues to operate as
before, Riad said the restructuring of the organization is seen as an alternative that can be
taken at this time because the current situation is very difficult38.

The finding shows another impact of COVID-19 for Air Asia airline which is the
implementation of a new travel policy for its passengers following the COVID-19 pandemic.
This includes requiring passengers to bring and wear their own face masks before, during and
after the flight, as well as during check-in and luggage. Any passengers without face masks
will not be allowed to board the plane. Air Asia also revised the cabin luggage policy to
facilitate social imprisonment, especially when boarding and landing, allowing only one
cabin luggage not exceeding seven kilograms per passenger. The move made by this airline
would help reduce unwanted contact between passengers and other passengers' luggage and
vice versa. There are also temperature checks at different checkpoints, including entrances
and all crews will be required to undergo temperature checks after each shift. The social
imprisonment needs to be monitored and there will be markers on the floor in the area for
queuing, including check-in counters and kiosks. Another security measure is the alternative
check-in counter to ensure adequate distance, in fact they are also working to have a
contactless contact process. Also, cabin crew would be required to wear protective equipment
on board, including face masks and gloves. The production staff would be monitored in
accordance with COVID-19 guidelines and cabin crews handling menu items would be
required to wear disposable gloves. The cabin crew also has been trained with procedures for
managing patients or passengers who are suspected of being unwell on board39.

The possible ways to reduce the impacts of COVID-19 pandemic on Air Asia airline’s
business is by opening a website to sell things to cover the losses of money they faced
38
Berita Harian Online, AirAsia tamatkan perkhidmatan 300 pekerja, June 4, 2020, accessed on November 17,
2020, https://www.bharian.com.my/bisnes/korporat/2020/06/696456/airasia-tamatkan-perkhidmatan-300-
pekerja
39
Berita Harian Online, AirAsia laksana dasar perjalanan baharu, April 27, 2020, accessed on November 15,
2020, https://www.bharian.com.my/bisnes/korporat/2020/04/682285/airasia-laksana-dasar-perjalanan-
baharu.

28
because of this pandemic. It may be helped them in their economy and people already know
well about their brand, so they can get easy target by contacting or emailing their customers
about the product they sell. The customers can also visit the website at any time as the
availability of online business is 24 hours. The online business may help this airline business
to continue survive as it can reach out and connect with the audience from global level. So it
can be a really great idea for Air Asia airline to do online business during this pandemic in
order to increase their customer engagement.

Other than that, they can just continue the flights but following all the instructions
from government about the standard operating procedure (SOP). This is essential in order to
avoid COVID-19 from spreading and infecting more people. Everyone need to give full
cooperation by wearing the mask at all time when there are people near them in order to
avoid any liquid contacts if someone sneezed. The passengers and the staffs also need to
always clean their hands with hand sanitizer to reduce the risk of being infected from the
virus COVID-19. All of the passengers’ also need to be checked to ensure only the healthy
one can continue their flight journey. This is so important because the risk for people to be
infected is higher when they contact directly with someone who already infected by the virus.
The most important thing to follow the SOP provided by the government is to keep the
distance between each other at least one metre. This is to make sure the virus cannot be
transmitted to other people if they are the one who infected by the virus COVID-19.

Last but not least, Air Asia can attract their customers by allowing their sick
customers to postpone their travelling by way of changing their flights date until they are
fully recovered instead of doing cancellations of their flight ticket. So, the customers will not
compensate their money to the Air Asia airline because they still going to take the flight but
in another time until they are not sick anymore. Once Air Asia doing this agreement, the
customers will not afraid of losing their money when they make their bookings early because
they can change the date of their travel if they need to postpone the date because of their
health. By doing this, they will not lose their customers and the airline can maintain their
economy state.

29
Chapter 5

Conclusion and Recommendations

Pandemic has altered so many things in our life such as the way of living, eating,
working and travelling. This change has triggered the airlines and airports to rearrange and
restructure its flying operations on the basis of sanitisation. Generally, passengers are the
strength of this sector and nurturing their willingness to travel would be a perplexing task for
the airlines. Societies are prepared with fear of transmission which have made them doubtful
about travelling. Therefore, aviation sector is essential by complex approach based upon their
powers and market opportunities. In light of the results of this research study, the researcher
recommended that Air Asia airline opened a website to sell things to cover the losses of
money they faced because of this pandemic. It may be helped them in their economy and
people already know well about their brand, so they can get easy target by contacting or
emailing their customers about the product they sell. Other than that, they can just continue
the flights but following all the instructions from government about the standard operating
procedure (SOP) to avoid COVID-19 from spreading and infecting more people. Last but not
least, Air Asia can also allowed their sick customers to change their flights date until they are
fully recovered. By doing this, they will not lose their customers and the airline can maintain
their economy state. At this time, recovery speed of Air Asia airline is very slow but for
future it has been expected that it will bounce back with more power.

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