KUALA LUMPUR: The government approved a RM1bil loan as a lifeline to AirAsia Group, according to Nikkei Asia.

It reported on Tuesday the loan will be made by a group of local banks under a government scheme to help companies deal with the fallout from the Covid-19 pandemic.

Nikkei Asia said the loan will be 80% guaranteed by the Finance Ministry, according to sources at the ministry and the airline who are aware of the plan.

"The RM1bil is deemed very crucial for AirAsia, to be utilized for repayment of short-term loans and fund working capital," one source close to the ministry said, Nikkei Asia reported. Disbursement is expected next month.