Towards the end of 2018, MAB’s liabilities were just below RM5.5 billion and on October 6th this year, the airline also announced a restructuring of a whopping RM16 billion worth of debt.
Aviation experts are starting to believe it’s time for Khazanah to reduce its ownership and move it towards full privatization as the government no longer has the big guns to power the airline, especially in these trying times.
It was reported that MAB’s parent company, Malaysia Aviation Group Bhd (MAG), had warned leasing companies that Khazanah would stop pumping funds into the group and was ready to shut it down if the ongoing debt restructuring exercise failed.
Malaysia Airlines currently still has over 12,000 employees across the group but salary cuts have already been in place since March this year.
With trouble knocking on Malaysia Airline’s door, the airline group would consider putting their funds into Firefly instead, a low coast airline fully owned by MAG, if the plan to restructure the RM16 billion worth of debt fails; this move would see Firefly become the national airline if Khazanah does in fact go ahead with it.
Venturing into the low-coast segment with Firefly would allow Khazanah more flexibility in the market as the premium segment see much more tougher circumstances.
Some say that Khazanah is able to turn Firefly into Malaysia’s new national airline.
“As long as Khazanah is ready and willing to inject rakyat’s money, any Malaysian company with a valid air operator’s certificate (AOC) can be the new national airline. Who can stop Khazanah?” Endau Analytics aviation analyst Shukor Yusof told in an interview with Bernama.
However there are also arguments that Firefly’s main focus has always been on domestic travel.
“However, by having less financial burden compared to MAB, it would be a good opportunity for Firefly to rescale, especially with a lot of narrow-body planes in the second-hand market and leasing market with low rates.
“While the tourism industry as a whole has not picked up, it may be an opportune time to rescale Firefly before travel demand gains traction in the future,” an aviation expert who wished to be anonymous said.
While the liquidation of Malaysia Airlines is deemed as a last result , the future of it is to hang in doubt for the time being. Khazanah will have big calls to make in the upcoming few weeks.