Malaysia Airlines on the brink of shutdown

Malaysia Airlines will have to shut down if its creditors decide not to back its latest restructuring plan, the carrier’s group CEO Izham Ismail said on October 10.

The statement came after a group of leasing companies claiming to represent 70 per cent of the airplanes and engines leased to the group rejected the latest restructuring plan presented by he airline, calling it “inappropriate and fatally flawed,” Reuters reported.

Izham told business news weekly The Edge that there would be “no choice but to shut the airline down” if not all lessors decided to back the plan, noting that some leasing companies have endorsed the restructuring plan.

He said the plan was to restructure the airline’s balance sheet over five years, achieving break-even in 2023 on the assumption that demand in the domestic and Southeast Asian markets returns to 2019 levels by the second and third quarters of 2022.

Cash injection from major shareholder Khazanah Nasional

The plan would also require a fresh cash injection from Malaysia Airlines’ major shareholder, sovereign fund Khazanah Nasional, to help the airline over the next 18 months.

Khazanah, on its part, has said that it would stop funding the airline and force it into a wind-down process if restructuring talks were unsuccessful.

However, Izham also said that there was a “plan B” for Malaysia Airlines in case the lessors would eventually reject the first plan. The “plan B” would involve shifting Malaysia Airlines’ air operator’s certificate to a new airline under a different name, or using the certificates of sister airlines Firefly and MASwings.



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Malaysia Airlines will have to shut down if its creditors decide not to back its latest restructuring plan, the carrier’s group CEO Izham Ismail said on October 10. The statement came after a group of leasing companies claiming to represent 70 per cent of the airplanes and engines leased to the group rejected the latest restructuring plan presented by he airline, calling it “inappropriate and fatally flawed,” Reuters reported. Izham told business news weekly The Edge that there would be "no choice but to shut the airline down" if not all lessors decided to back the plan, noting that some...

Malaysia Airlines will have to shut down if its creditors decide not to back its latest restructuring plan, the carrier’s group CEO Izham Ismail said on October 10.

The statement came after a group of leasing companies claiming to represent 70 per cent of the airplanes and engines leased to the group rejected the latest restructuring plan presented by he airline, calling it “inappropriate and fatally flawed,” Reuters reported.

Izham told business news weekly The Edge that there would be “no choice but to shut the airline down” if not all lessors decided to back the plan, noting that some leasing companies have endorsed the restructuring plan.

He said the plan was to restructure the airline’s balance sheet over five years, achieving break-even in 2023 on the assumption that demand in the domestic and Southeast Asian markets returns to 2019 levels by the second and third quarters of 2022.

Cash injection from major shareholder Khazanah Nasional

The plan would also require a fresh cash injection from Malaysia Airlines’ major shareholder, sovereign fund Khazanah Nasional, to help the airline over the next 18 months.

Khazanah, on its part, has said that it would stop funding the airline and force it into a wind-down process if restructuring talks were unsuccessful.

However, Izham also said that there was a “plan B” for Malaysia Airlines in case the lessors would eventually reject the first plan. The “plan B” would involve shifting Malaysia Airlines’ air operator’s certificate to a new airline under a different name, or using the certificates of sister airlines Firefly and MASwings.



Support ASEAN news

Investvine has been a consistent voice in ASEAN news for more than a decade. From breaking news to exclusive interviews with key ASEAN leaders, we have brought you factual and engaging reports – the stories that matter, free of charge.

Like many news organisations, we are striving to survive in an age of reduced advertising and biased journalism. Our mission is to rise above today’s challenges and chart tomorrow’s world with clear, dependable reporting.

Support us now with a donation of your choosing. Your contribution will help us shine a light on important ASEAN stories, reach more people and lift the manifold voices of this dynamic, influential region.

$
Personal Info

Donation Total: $10.00

 

 

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