Even with plans in the pipeline for a five-year restructuring exercise of Malaysia Airlines, its CEO warns that he will have little choice but to shut it down if creditors don’t get on board.
The flagship carrier aims to break even by 2023, but the plan is contingent on the support of all its creditors.
And, according to group CEO Izham Ismail, while it currently has the support of many, others are still on the fence.
“I need to get the 50:50 ones (on board) with those who have agreed,” he said in a report by World of Aviation.
This comes a week after Finance Minister Tengku Zafrul Tengku Aziz said the government would not bail out either Malaysia Airlines or AirAsia, the country’s largest airlines which have taken the brunt of the recent lockdown and closure of borders to contain the Covid-19 pandemic.
Malaysia Airlines, which reported a 94% dip in its finances after travel restrictions were imposed across the world, has also been offering employees no-pay leave and implementing pay cuts for those in the higher salary bracket.
Izham said the airline would have no choice but to “shut down” entirely if he fails to obtain the unanimous support of creditors and lessors on the proposed restructuring, which is banking on a recovery to pre-pandemic levels of domestic and regional demand.
He had also been reported as saying that the airline burns through US$88 million a month despite its present ultra-lean structure.
Malaysia Airlines axed thousands of workers following the double disasters of MH370 and MH17 in 2014.
In addition to suffering massive losses in the second and third quarters this year due to border closures, it was also hit with news that its sole shareholder, sovereign wealth fund Khazanah, had earmarked only US$139 million for it.
According to Reuters, its “Plan B” is for Khazanah to inject funds into Firefly, which is fully owned by Malaysia Airlines’ parent company.
World of Aviation meanwhile mentioned a shift of Malaysia Airlines’ air operators certificate to a new airline under a different name, or the use of the certificates of Firefly and MASwings.
“If you ask me, is Plan B credible? Of course, it is. We have all the skill sets in place,” Izham was quoted as saying.