Airbus to lose over USD5B in orders under AirAsia X’s proposed restructuring

KUALA LUMPUR (CNA) – Aircraft manufacturer Airbus SE said it stands to lose more than USD5 billion worth of aircraft orders if AirAsia X Bhd’s (AAX) debt restructuring scheme goes through, court documents showed, joining a dozen creditors that have challenged the Malaysian low-budget carrier’s plan.

Airbus’ challenge comes as AAX defended its scheme from key lessor BOC Aviation Limited’s (BOCA) allegations that it favoured Airbus and lacked a debt-to-equity swap offer for creditors.

In a December 16 affidavit filed at Kuala Lumpur High Court, Asia-Pacific Head of Region Anand Emmanuel Stanley said there was a strong possibility Airbus “will suffer substantial losses and prejudice” from termination of purchase agreements.

“AAX has ordered and Airbus has already built, or substantially built, seven A330neo aircraft which are currently in the inventory,” he said, adding that there are another 71 on order that may impact Airbus’ profitability if cancelled. AAX revealed in a December 17 affidavit stated it owes Airbus MYR48.71 billion (USD12 billion) including predelivery payments for committed purchase of 118 aircraft.

BOCA has said AAX’s debt calculations should not include future debts, which are primarily owed to Airbus. Airbus alone holds about 75 per cent of the total debt value needed to approve the restructuring, giving lessors relatively little say.

A Boeing 737 Max jet prepares to land at Boeing Field following a test flight in Seattle. PHOTO: AP

AAX Senior Legal Counsel Shereen Ee denied the calculations were unfair as they also consider termination compensation for BOCA until the end of its lease period.

As for BOCA’s proposed debt-to-equity conversion, Ee said it “would run counter to the objective of restructuring AAX to ensure it can raise fresh funds to continue as a going concern”. She said any party may have an equity stake in AAX if they inject fresh funds in return for it.

BOCA became one of Norwegian Air’s top shareholders in May after lessors agreed to convert debt to equity.

The airline failed to get more state support last month and sought bankruptcy protection. It secured shareholders’ vote last week for its rescue plan.

BOCA is AAX’s largest lessor, AAX’s lawsuit showed.

AAX would continue engaging with all creditors, a company spokeswoman said.