Shares in Malaysia's AirAsia Group dropped over 17 percent late Wednesday, marking their highest daily retreat after its auditor said it was not sure about the capacity of the budget airline to continue operating as the ongoing global health crisis deals a heavy blow on the company.

Ernst & Young released an audit opinion disclosing that the 2019 earnings of the carrier were planned on a going concern basis, which is contingent on recovery from the pandemic and the success of fundraising measures. The budget carrier shed 15 sen on the Malaysia bourse, or 17.5 percent, to 70 sen at the close.

In response, AirAsia stated Malaysia's stock exchange had given it 12 months leeway from being listed as a financially troubled entity, a classification that would require the carrier to submit a plan for improving its business.

Ernst & Young, in a statement released to the Kuala Lumpur stock exchange, said the airline's current liabilities had already surpassed its existing assets by 1.84 billion ringgit ($430 million) at the end of last year, a period when AirAsia reported a 283 million ringgit net loss. That was prior to the COVID-19 pandemic, which has further impacted the group's financial performance.

AirAsia, in response, disclosed in an exchange filing Wednesday that the auditor's assessment and a drop in shareholder equity sparked the criteria for a so-called Practice Note 17, which applies to financially-burdened businesses. However, AirAsia will not be listed as PN17 as the Malaysian exchange halted application of its status from April to June 2021 as part of a relief program in view of the crisis.

Billionaire Tony Fernandes, AirAsia's founder and chief executive, also co-owns the Queens Park Rangers football club in the United Kingdom. The world's airline companies have been badly affected by the sharp decline in travel demand because of the coronavirus. The carrier's cash flow has been further overwhelmed by the grounding of its fleet of jets in the midst of tight travel curbs and lockdowns.

The low-cost carrier posted a net loss of 803.3 million ringgit ($187.91 million) for the three-month period ended March, from a net profit of 96.1 million ringgit in the previous quarter. This marks the group's biggest first-quarter drop since it went public on the Malaysian exchange in November 2004, Refinitiv data showed.

Shares in AirAsia, one of the largest budget airlines in Asia, have plummeted 58 percent so far this year, giving the company a market value of around $550 million. Shares in its long-haul division, AirAsia X Bhd, was down 5 percent late Wednesday.