AirAsia taps RM909m private credit deal from Deutsche Bank amid oil surge

KUALA LUMPUR, April 20 — Deutsche Bank is marketing a US$230 million (RM909 million) private credit deal for AirAsia Aviation Group, as the budget carrier navigates surging fuel costs driven by escalating tensions in the Middle East, Bloomberg reported.

The 18-month financing is structured as a revenue bond backed by ticket sales from several AirAsia routes, according to people familiar with the matter. 

The German lender has already underwritten and fully funded the transaction, and is now sounding out selected banks and funds to syndicate the debt.

Both Deutsche Bank and AirAsia declined to comment when contacted by Bloomberg.

The fundraising push comes at a tricky moment for airlines globally. Oil prices have climbed sharply since early March, as conflict involving Iran has disrupted energy infrastructure and forced the closure of the Strait of Hormuz — a key artery for global oil shipments. The spike in jet fuel costs has already pushed some carriers to scale back services, raising questions over margins in an industry highly exposed to energy prices.

Against that backdrop, the deal will serve as a test of investor appetite for aviation-linked private credit, particularly for a low-cost carrier like AirAsia that relies heavily on high passenger volumes and competitive pricing.

Still, there are signs of resilience. AirAsia’s near-term outlook remains supported by firm travel demand and ongoing cost discipline, including fleet maintenance optimisation and tighter network planning, according to a research note from Public Investment Bank cited by Bernama.

The structure mirrors a previous securitised bond issued by AirAsia in 2024, when it raised US$443 million through a two-tranche deal also backed by ticket revenues. That earlier financing drew support from private credit firms such as Ares Management Corporation and Indies Capital Partners, alongside aircraft lessors.