SINGAPORE: Malaysian long-haul budget carrier AirAsia X is set to announce a rights issue of shares as early as Friday to try and close a growing cash-flow gap, said two sources with direct knowledge of the matter.

The airline's Chief Executive Officer, Azran Osman-Rani, and Chief Financial Officer, Chew Eng Loke, are also likely to leave the company, the sources said.

The sources did not say how much AirAsia X was targeting to raise from the rights issue but said the airline was also examining other funding options. They declined to be named because the matter was not public yet.

A spokesman for the airline said he was unable to comment on either the rights issue or on the likely management changes.

AirAsia X, which operates Airbus A330s mainly on routes to Australia, China and Japan, posted a net loss of RM210.9 million ($58.23 million) for the three months to Sept.30, 2014, its worst ever quarterly loss since listing in July 2013.

Its shares have dived 46 percent from the IPO price of RM1.25 a share, while the Malaysian benchmark stock index has risen 1.6 percent since July 2013.

An affiliate of Asia's largest budget carrier group AirAsia , the airline pioneered low-cost long-haul travel in Asia with aim of piggy-backing on the success of AirAsia's short-haul network.

Its success led to the emergence of competitors such as Singapore Airlines' subsidiary Scoot and the long-haul operations of Philippine carrier Cebu Pacific. Qantas Airways' subsidiary Jetstar also expanded its long-haul operations.

Analysts, however, have cautioned that the business model was highly susceptible to intense competition and high costs, given the narrow margins that low-cost airlines already have.

In 2014, the airline was hurt by a sharp fall in Chinese traffic to Malaysia after Malaysia Airlines flight MH370 disappeared last March while on a scheduled flight to Beijing. Yields on the key Australian routes have also been soft due to intense competition.

AirAsia X, which Malaysian media said had some trouble paying staff salaries last year, had RM124.6 million in cash as of Sept. 30, 2014, according to Eikon data, 14 percent lower than a quarter earlier.

In November, after releasing its quarterly results, AirAsia X said that it would continue to work to "deliver positive cash growth."

It announced then it had completed the sale and leaseback of two A330s and said it was hoping to do the same for more planes to reduce debt and generate cash.

AirAsia X also started up affiliates in Thailand and Indonesia last year. While the former began operations in June, the launch of the latter's inaugural flight between Bali and Melbourne has been delayed indefinitely after failing to get the approval of Australian regulators.

Azran told Reuters last year that the airline could defer the delivery of the 10 Airbus A350s that it was due to receive in 2018 or 2019. Last year, the airline ordered 55 A330neo aircraft. ($1 = 3.6220 ringgit) -- REUTERS