Malaysia Airlines, a chronically unprofitable flag carrier of Malaysia that has been restarted more than once, appears to survive the current slump with the help of its creditors and government.
The country had an alternate plan, if the restructuring of MAB wouldn’t succeed, to slowly build up a regional airline called Firefly.
You can access Malaysia Airlines here.
Here’s an excerpt from the Malaysian Reserve:
MALAYSIA Aviation Group (MAG) may not have to proceed with its Plan B to make FlyFirefly Sdn Bhd the flag carrier, as prospects to revive Malaysia Airlines Bhd (MAB) improve considerably.
“The Plan B alternative is not necessary as negotiations with creditors have been successful or successful enough, with over 75% agreeing, which means the new terms can be applied to any remaining holdouts using the UK scheme,” Sobie told The Malaysian Reserve (TMR).
MAB recently said its parent company, MAG, is currently at the tail end of its restructuring exercise as a large majority of its creditors have given full support towards a consensual agreement.
The airline said, however, pending confirmation from the remaining small minority creditors, MAG is exploring the use of a UK Scheme of Arrangement to complete the restructuring exercise by the first quarter of 2021 (1Q21).
The analyst said the fleet cost would come down significantly, giving the national flag carrier a competitive fleet of Boeing 737s, Airbus A330s and A350s.
With the commencement of jet operations, MAG said Firefly will be complementing MAB in serving the leisure market while diversifying its base, connecting secondary cities in Malaysia to East Malaysia, Thailand, Indonesia and Singapore.
The problem with Malaysia Airlines that has now been restarted a few times is that it has never been run as a commercial entity, like its “sister” airline in Singapore, but rather an entity closely tied to the government.
The airline ended flights to North America and most of Europe to become a regional airline to soon have a new plan in place with more long-haul flying.
The airline planned to use the A380s sitting at the Kuala Lumpur airport for religious charter flights to Saudi Arabia.
Someone at the airline decided that it would be good to go “dry” on regional flights that was not well received from passengers who were connecting from long-haul services.
I do like Malaysia Airlines and wish the airline to survive and stay part of the Oneworld Alliance.