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Business trends

AirAsia wins Malaysia state backing for $242m COVID lifeline

Budget carrier expected to reveal more job cuts and wants to reduce size of fleet

AirAsia aircraft at Kuala Lumpur International Airport. The carrier has sought government backing for loans to nurse it through the coronavirus pandemic.   © Reuters

KUALA LUMPUR -- Malaysia's government is backing a 1 billion ringgit ($242 million) loan as a lifeline to budget carrier AirAsia Group as it struggles to contain the fallout from the coronavirus pandemic, Nikkei Asia has learned.

The loan will be made by a group of local banks under a government scheme to help companies deal with the pandemic. It will be 80% guaranteed by Malaysia's finance ministry, according to sources at the ministry and the airline who are aware of the plan.

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