AirAsia shares extend plunge after CEO Tony Fernandes

KUALA LUMPUR – Shares of budget airline AirAsia Group and its long-haul subsidiary, AirAsia X, extended their slide in early trade on Tuesday ( 4) after the group’s CEO Tony Fernandes and chairman Kamarudin Meranun said they would step aside for two months.

Both Mr Fernandes and Mr Kamarudin announced late on Monday that they would step aside as authorities investigate allegations that Airbus had paid a bribe of US$50 million (S$68.5 million) to win plane orders from the AirAsia.

AirAsia Group’s shares fell 5 per cent as markets opened in Kuala Lumpur on Tuesday, while AirAsia X shares lost 8 per cent. On Monday, AirAsia shares sank 10 per cent, while AirAsia X shares dropped 12 per cent.

A committee comprising the non-executive members of AirAsia’s board will review the allegations and take any necessary action, Asia’s biggest budget airline said on Monday 3).

Mr Fernandes, one of the aviation industry’s best-known executives, and Mr Kamarudin will remain advisers, however, “in view of the current difficult economic circumstances facing the airline industry”, the company said on Monday.

Senior company executive Tharumalingam Kanagalingam will be the acting CEO, with the changes effective immediately.

In a joint statement on Monday, Mr Fernandes and Mr Kamarudin denied any allegations of wrongdoing or misconduct as directors of AirAsia.

“We would not harm the very companies that we spent our entire lives building up to their present global status,” they said.

The allegations were revealed as part of a record US$4 settlement Airbus agreed with France, Britain and the United States.

Prosecutors said the plane had bribed public officials and hidden payments as part of a pattern of worldwide corruption.

Analysts said the accusation against AirAsia comes at a particularly bad time as airlines grapple with a slowdown in business because of the fast-spreading coronavirus epidemic that has disrupted air travel.

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