Malaysia Airlines group CEO Izham Ismail has threatened that the airline will have “no choice” but to shut down entirely if its lessors decide not to support its latest restructuring plan.
Izham said that there are a “sizeable” number of creditors who have agreed to the proposed restructuring plan however a number have outright rejected the plans, while some still remain undecided, or “50:50” in his words.
“I need to get the 50:50 ones (on board) with those who have agreed,” he said.
According to Izham, the proposed plan was to restructure the airline’s balance sheet over five years, and would see the company break even in 2023, assuming that demand in the domestic and south-east Asian travel markets hit 2019 levels by the second or third quarter of 2022.
Included in the plan was also a further cash injection from its only major shareholder, the state fund Khazanah Nasional, which would see the airline through the next 18 months.
Sources have also said the airline has requested “steep discounts” on aircraft rentals as a part of this plan.
Should lessors not agree to the restructuring plan, Izham said the company is not afraid to execute “Plan B”, which would involve shifting Malaysia Airlines’ air operators certificate (AOC) over to a new airline under a different name, or using the certificates of sister airlines Firefly and MASwings.
“If you ask me, is Plan B credible? Of course, it is. We have all the skill sets in place,” Izham said.
Lessors who claim to represent 70 per cent of the aircraft and engines leased to the Malaysia Aviation Group (MAG) have reportedly called the proposed restructuring plan “inappropriate and fatally flawed”.
Other sources have confirmed that some lessors are backing the proposed plans.
MAG has previously warned lessors in a letter that Khazanah, the sole shareholder of MAG, will cease funding the group, which will result in the liquidation of MAG.
Malysia Airlines has struggled to recover from two unfortunate tragedies in 2014, firstly the mysterious disappearance of flight MH370 and then the shooting down of flight MH17 over eastern Ukraine.
The airline’s struggle has only been compounded by the ongoing COVID-19 crisis, which has decimated international travel demand to an unprecedented scale.
More to come.
Rusty
says:It’s actually a A333 with an I Typedoor @ L3R3
Jahirhussain
says:Up to 2025….no airline will meet the break even budget.
Mohd Azmi Othman
says:Izham, you are doing gd job.. Keep it up, you know whats best and stood your rightfull ground.. We are proud of you.. Thank you for your dedicated management and team..
Izmi
says:yeah,just close it down. MAS has gone down the drain due to incompetency & mismanagement. Why must the taxpayers suffer to revive a failed airline? Forget false pride & stop dreaming ,MAS simply cannot compete on a level playing field with other carriers….bye bye MAS.
Jimmy LASKER
says:Malaysian airlines is one of world finest airlines. I would like to see this airlines must continue to do wonderful job for the world travellers.
Zawawi hashim
says:To me any business that is sick or keep losing money year aftwr year either through bad management or not competitive enough must be sold off or close down. No point to keep on flogging a dying horse. Better spend the money somewhere else. Dont talk about pride or maruah. A business is to make money. Otherwise just shutbit down
Williams
says:Yes a very sad story I hope MAS survives this extremely difficult time. They were a great airline to work for, when they were expanding there operations in the early 1990s.
Taib
says:If the government can guarantee RM1 billion loan to Air Asia, why can’t it do the same for MAS?
Jlow
says:Good times bad times never heard of MAS making money… Where did the money go???
[email protected]
says:In business, there is no pride.. When shareholders put in thier bets.. you don’t expect them to loose every time..In this case, everyone including Air Asia boss doesn’t not want this sickly horse. Might as well put it down.. don’t let the stake holder suffer.
Raj Sridharan
says:It is sad if MAS has to go. Myself and my family have always supported MAS. The professional caring service will be missed.
Samirah Abdullah
says:First refund my ticket which u guys forced me to change into a voucher.give bavk the money 8k no dmall change
Naomi
says:Many successful multibillion businesses had gone through many failures before and eventually reach greater heights. Don’t give up MAS. When there is a will, there is a way.
Toby Kettel
says:I remember my first flight with MAS back in 1981 on a DC-10 from FRA do MEL Australia with refueling stops in Dubai and Transit in KL. I still keep my ticket as a memory.
Fly the golden wings: MAS great Service, great Airline. Would be very sad to see it folding.
Richard Kam
says:Good move to shut it down, all the while never heard mas making money, so what good to keep it flying without ‘profit’, spend somewhere else the tax payer money, good bye mas…
putra
says:We should look at MAS via 360 degrees helicopter view.
Not blaming the tò team for failing to so a very constraint task with
” politically ” influences with Govt Investment arm Khazznah who are able to asssit them in certain operatinonal cost can be reduced with the collàboration among its related subsidiaries.
There are some things even the Group CEO.
Going forward there is a need to have a takeover who has enough funds to acquires new aircraft and assets which will reduce the operating cost overall and getting another intl airline to be part of the joint operation team
ABDUL RAHMAN BIN MOHD YUSOFF
says:Keep our national carrier MAS flying even how hard the turbulance is coming…take it as a positive challenge, feel proud to be Malaysian and we are capable to manage the crisis. Trust in yourself sir…MALAYSIA BOLEH
Alex Chang
says:Mas owned most priority to flight thru other countries neither in Eu or Asia but proved to be weaker than Airasia to survive. Anything wrong with the management or the CEO?.
Puan
says:Mas will success without political interference.
Closing everything belong to nations is not a smart move.. eventhough good for businessman.. MAS shoud not at all be privatised at the very 1st place. The same goes to telekom, tenaga nasional , pos malaysia.. bernas ..and etc.. Dirty political man have contribute to all these problems
Nexus Araman
says:MAS is fine as a unit.Excellent employees but arrogant & incompetent senior management and CEO. Have a committee of capable employees and/or former employees to run.
This company will can be great again.
Sally
says:I love to travel with MAS. Business are challenging and with high risk particularly with the covid19. Cost Benefit Analysis is vital. I really hope MAS can maintain the service and sustain by all means.
Anthony Blissett
says:Will I get my money back London Cebu £600