Bail out or downsize? Malaysia’s stark choice as AirAsia losses mount
Rival carriers lack commercial incentive to take over unprofitable routes, which could force the government into a subsidy dilemma, analysts say
That reality could leave the government facing a stark choice: allow domestic flight services to shrink or step in with subsidies for essential routes, rather than assuming competitors will automatically fill any void left by the country’s largest budget airline.
The concern has taken on added urgency as AirAsia seeks fresh financing following a sharp rise in jet fuel costs, which contributed to heavy losses across its wider airline group.
