Malaysia Airlines began a restructuring process in October that required debtors to accept concessions or the airline would fold for good.
On Monday, the UK court gave the green light to the restructuring process that would allow the airline to reduce its liabilities that stand at more than $3.7B (and no flights in sight).
There appear to be four entities:
- MAB – Malaysia Airlines Berhad (the arline)
- MAG – Malaysia Aviation Group
- MAB – MAB Leasing Limited (aircraft lessor)
- Khazanah Nasional – Malaysia’s sovereign wealth fund that owns the airline
The government has already injected 28B MYR (roughly $7B) into the airline (a couple of restarts) through Khazanah.
According to the EDGE, the plan is to:
“The conclusion of the legal process together with the holistic reset of the operating platform and balance sheet have paved the way for a more agile and lean future for the carrier, giving MAG room and ability to fulfil its enhanced Long-term Business Plan (LTBP 2.0) and achieving its Vision 2025,” MAG group CEO Captain Izham Ismail said.
“The longer-term vision of MAG is to establish itself as a leading global travel group. This signifies a paradigm shift in the way we prioritise the different business segments and subsidiaries in the group’s portfolio.
“We seek to expand MAG’s involvement into other travel-related products and services beyond flights, which will go a long way in helping our customers complete their endto-end travel experience. Our geographical advantage, award-winning solutions and services, plus signature Malaysian Hospitality will also help us in diversifying our revenue stream by minimising the need for us to rely on the heavily competitive air travel industry for survival,” he added.
Conclusion
This is now the fourth or fifth reboot of Malaysia Airlines, and I’ll see another one on the horizon once this $891M has been spent by 2025.
You can never know what their strategy is. This week their plan is to be a regional airline, and the next week an airline connecting Europe and Asia, with people hopefully having a stopover in Malaysia.
They were trying to sell their A380’s only to be used for religious charters the next week (because no buyers) to back to the regular rotation.
I believe that Malaysia Airlines will continue on its path with bailouts from the sovereign wealth fund, essentially the public, every few years.
