Economy

Malaysia weighs shutting down or selling national carrier

Malaysia Airlines/Bloomberg

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Malaysia Airlines is facing increased pressure to revive its performance after its parent Khazanah swung into a MYR 6.27 billion pretax loss last year.

Wednesday 13, March 2019

(Bloomberg) --Prime Minister Mahathir Mohamad said he’s studying options for flag carrier Malaysia Airlines, including whether to invest more funds, sell it off or even shut the company down.

Khazanah is demanding the carrier to come up with a strategic plan to compete in the industry, after pouring in MYR 6 billion ($1.5 billion) into the airline to make it profitable.

Mahathir said that, “We will nevertheless be studying and investigating as to whether we should shut it down or we should sell it off or whether we should refinance it. All these things are open for the government to decide.”

Malaysia Airlines has sought to turn itself around since being taken private by sovereign wealth fund Khazanah Nasional in 2014. That followed tragic incidents involving one of its planes disappearing over the Indian Ocean and another being shot down over Ukraine.

While the carrier has no Boeing 737 Max aircraft in its fleet, it expects to receive deliveries of that model in 2020. The Government has asked Khazanah and Malaysia Airlines to revisit that agreement with Boeing to ensure the safety of passengers, said Minister of Economic Affairs Azmin Ali, adding that they’re closely monitoring the investigation into the Ethiopian Airlines crash.

Shahril Ridza Ridzuan, Khazanah’s Managing Director, said that the carrier accounted for about half of the impairments that weighed on the wealth fund’s portfolio.

The options for the airline were discussed at the last board meeting involving the carrier and Khazanah, who are taking up this matter seriously, added Azmin.

 

TAGS : Prime Minister Mahathir Mohamad, Khazanah, Malaysia Airlines

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