The troubled flag carrier Malaysia Airlines has been delisted from the stock exchange after it’s sovereign wealth fund decided to buy out the 30% of the stock that it didn’t already own.
The airlines was losing more than a million dollars per day before the two disastrous accidents of MH370 and MH17 that have lead to softer bookings and a lower yield for the airline. Apparently the traffic from China alone is down by 60%.
Here’s excerpt from Bloomberg:
Even before that disappearance, Malaysia Airlines had racked up 4.13 billion ringgit in losses over the previous three years. Khazanah said it is in the final stages of completing a restructuring proposal, and expects to unveil detailed plans by the end of August.
“Only through a complete overhaul of the company can we deliver a genuinely strong and sustainable national carrier,” Najib said in an e-mailed statement today. “Piecemeal changes will not work. This process of renewal will involve painful steps and sacrifices from all parties.”
The carrier will probably lose more than 1 billion ringgit in 2014, according to average analyst estimates compiled by Bloomberg. Khazanah said in June the carrier had funds to last about a year. Privatizing the company will allow “greater flexibility” to restructure the airline which traces its routes to 1937, it said today.
Restructuring usually means slashing routes and smaller flight frequencies. It is very difficult to downsize to profitability, but I guess that there is not much else left to do at this point. The airline has already cut its routes to Los Angeles, Buenos Aires and Johannesburg. Let’s hope that they can pull through this one.