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SINGAPORE (Oct 17) – Malaysia Airlines Bhd’s parent company is still negotiating with lessors and creditors a restructuring plan to keep the airline alive, but talks are taking longer than anticipated, according to a staff memo seen by Reuters.
“Negotiations are still ongoing and taking longer than anticipated, but so far we are gaining encouraging momentum from lessors and creditors,” said Capt. Izham Ismail, Malaysia Airlines Group Chief Executive Officer (CEO) and also Managing Director of the parent group Malaysia Aviation Group (MAG) said yesterday in a memo to staff.
In response to a Reuters MAG said in an email today that it is “continuing discussions with creditors about its current restructuring exercise.”
MAG, owned by the state-run Khazanah Nasional Bhd fund, said Izham’s memo to staff was to address concerns among employees.
Malaysia’s national airline is looking to restructure after the Covid-19 pandemic forced it to cut back on operations.
The carrier was restructured after two fatal accidents in 2014, but unlike then, the government has been unwilling to rescue it this time.
Reuters reported last week that a group of lessors had rejected a restructuring plan that involved deep discounts, bringing the airline closer to a showdown over its future.
In the memo to staff, Izham assured them that MAG’s restructuring exercise “is still in progress.”
“Do you see me throwing in the towel yet? Along with the senior leadership team, we are still here fighting for the survival of the company,” Izham said.
On Thursday, MAG said that the Firefly Airlines subsidiary will begin flying in early 2021 as part of a realigned business strategy for the entire group.
Reuters reported last week that MAG had warned lessors that its sole shareholder Khazanah would shut down the airline if restructuring negotiations were unsuccessful and would instead focus on Firefly.
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