AirAsia said the Subscription would help reduce IAA's gearing without any need for AirAsia to inject further funding or capital to IAA as it entailed converting the amount owed to the company into equity of IAA. "Indonesia is a crucial market for AirAsia. International Air Transport Association forecasted that Indonesia is expected to be the sixth largest market for air travel by 2034 with 270 million passengers. "The risk of suspension of IAA would not only affect the AirAsia brand but also affect the network and future growth of AirAsia Group," it said. AirAsia said the perpetual capital securities carry an initial periodic distribution rate of 2% per annum for the first 12 months and subsequently 8% per annum on outstanding principal amount to the perpetual capital securities until the first call date. It will then be stepped up to 13% per annum on outstanding principal amount of the perpetual capital securities post the first call date thereafter.