Airlines across the world have been hit hard by travel restrictions due to the pandemic, and shares in AirAsia have reportedly dropped by over 10 per cent. Ernst & Young have also highlighted AirAsia’s debts in a statement to the Kuala Lumpur stock exchange, saying that the airline’s liabilities exceeded its current assets by 1.84 billion ringgits (£340 million) at the end of 2019, before the Covid-19 crisis began.

Now, AirAsia has reported a quarterly loss of 803.8 million ringgit. This could ‘indicate existence of material uncertainties that may cast significant doubt on the Group's and the Company's ability to continue as a going concern’, Ernst & Young said in its audit opinion statement.

Tony Fernandes, Founder and CEO of AirAsia, said in a statement: "This is by far the biggest challenge we have faced since we began in 2001. Every crisis is an obstacle to overcome, and we have restructured the group into a leaner and tighter ship. We are positive in the strides we have made in bringing cash expenses down by at least 50 per cent this year, and this will make us even stronger as the leading low-cost carrier in the region.”

AirAsia has said it is in talks over collaborations that could bring in additional investment and has applied for bank loans.