Low-cost airline AirAsia, co-founded by QPR football club chairman Tony Fernandes, faces a turbulent time as its shares plunged today amid financial concerns about its Indonesian affiliate.
The skidding shares came after Indonesia AirAsia — which is 49% owned by AirAsia Berhad — was named as one of 13 Indonesian airlines called to inject new money into their businesses.
Shares in AirAsia have dropped more than 13% to a five-year low, a month after a report by a Hong Kong research house questioned the group’s accounting practices.
Affected companies were ordered by Indonesia’s transport ministry to ensure a positive equity position before July 31 in order to retain their operating licenses.
The scrutiny of its finances is part of a move to improve aviation safety credentials.
A ministry spokesman said: “If they don’t meet the requirement, we will suspend them.”
The company said it would seek a meeting with officials and its Indonesian operations were not immediately impacted.
<blockquote class="twitter-tweet" lang="en"><p dir="ltr" lang="en">Cash extremely strong. I confirm one more time for equity investors who read garbage. NO Rights issue.— Tony Fernandes (@tonyfernandes) <a rel="nofollow" target="_blank" href="https://twitter.com/tonyfernandes/status/618569042673057792" class="body-link" data-vars-item-name="BL-9926-https://twitter.com/tonyfernandes/status/618569042673057792" data-vars-event-id="c23">July 7, 2015</a>
It is the latest hurdle for the business following a December crash of an Indonesia AirAsia jet with the loss of 162 passengers.
