Air Asia Group Bhd shares plunged as much as 21% to the lowest in almost four years, after reports Malaysia’s government had asked other local airlines to potentially absorb the cash-strapped carrier’s domestic market share. The talks with Malaysia Airlines Bhd and Batik Air are part of scenario planning as authorities monitor Air Asia’s financial health, Reuters reported, citing two people with knowledge of the matter. Shares of sister company Capital A Bhd fell as much as 18% to the lowest in more than a year.

The decline reflects growing investor concern over Air Asia’s ability to sustain operations amid ongoing financial strain and potential restructuring. Analysts note that any forced absorption of routes could significantly alter the competitive landscape in Malaysia’s domestic aviation market. The situation remains under close watch by regulators and industry stakeholders as the company navigates liquidity challenges.