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The following is a Malaysia Airlines press release, reproduced in its entirety.
KUALA LUMPUR (Oct 2): Malaysia Airlines Bhd has confirmed that it has recently contacted its lessors, creditors and key suppliers as the national carrier embarks on an urgent restructuring exercise.
When Malaysia Airlines and all its sister companies of the Malaysia Aviation Group (MAG / group) launched their Long Term Business Plan (LTBP) in early 2019, the group achieved better overall net income after tax (NIAT) compared to 2018 , which is 18% ahead of target, while group revenue grew 7% year-on-year. NIAT’s improved performance is despite higher fuel prices, increased foreign exchange, and the impact of NIF 16. Meanwhile, Malaysia Airlines passenger revenue per available seat-kilometer (RASK) increased by 3 % and performance increased 5% thanks to a 5% year-on-year increase in available seats per kilometer (ASK).
The airline achieved record RASK results in the second half of 2019, with the highest RASK ever recorded in three years.
Malaysia Airlines also made significant operational improvements, exceeding its punctuality target of 80% to 83%, the best since 2015. Mishandled baggage has steadily improved to 5.6 bags per 1,000 passengers, the best in the last five years.
Additionally, Malaysia Airlines’ customer service index improved to 78%, the best in the past four years, and the promoter’s net score rose to +14 compared to -22 in the past three years.
Malaysia Airlines and MAG were poised to continue the good momentum in 2020; But the COVID-19 pandemic caused an unprecedented lockdown around the world, forcing all airlines to halt operations and ground almost their entire fleet for most of March to June this year.
At the height of the COVID-19 crisis, MAG continued to serve the nation and our customers by maintaining some minimal national and international connectivity, primarily to facilitate essential movements, the assembly of rescue and repatriation flights, and ensuring that supply chains global supplies were maintained through our cargo operations.
The negative financial impact of the COVID-19 crisis has been unprecedented, and MAG has wasted no time taking tough action since March to cut costs and conserve cash, including introducing significant pay cuts for the entire management team and employees. pilots, introducing non-payment. get out, look for payment deferrals, renegotiate contracts, etc. to survive and protect as many jobs as possible.
With the pandemic still showing little sign of improvement with a resurgence in some markets; no visibility of a vaccine that needs to be widely distributed; and the strict border restrictions that remain in place for our key markets; this will hamper the return of international business and leisure travel demand for MAG in the next two years. The profound impact of the prolonged COVID-19 crisis has forced MAG to take drastic measures to further review its LTBP to ensure the group’s relevance and survival. This includes reworking its fleet and network plans, to be able to cope not only with the uncertain and volatile aviation landscape, but also weaker traffic demand for the foreseeable future.
This plan, which requires a comprehensive restructuring of MAG’s business and capital structure, relies heavily on individual contributions from all relevant stakeholders to help the group emerge from this crisis as a financially and well-capitalized airline group. healthy. This restructuring exercise is expected to be completed in the coming months. However, if such an outcome is not possible, the group will have no choice but to take more drastic measures.
As a national airline, MAG intends to guarantee a certain level of continuous connectivity for its passengers; and minimize the impact on the livelihoods of the direct and indirect workforce and the industries that depend on their operations. Being an economic facilitator for the country, MAG is aware that any action taken by the group will have a greater impact on the aviation industry in general and on the nation.
Therefore, you undertake to ensure that your restructuring exercise is carried out properly and fairly through whatever form of mechanism is appropriate.
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