The Malaysian authorities has indicated that it’s unwilling to offer more money or mortgage ensures to Malaysia Airways’ guardian by way of the Khazanah state fund except plane lessors settle for concessions.
Malaysia Airways rebooted as soon as within the mid-2010s and was already in bother earlier than Covid-19 hit the airline business within the first quarter of 2020.
In keeping with the papers seen by Reuters, the plan is to restart the airline by way of the FireFly subsidiary except an settlement is reached with the plane lessors.
FireFly, an ATR operator, at present flying tertiary routes, would buy plane and fly choose home routes earlier than buying wide-body plane for regional / long-range routes.
Right here is an excerpt from Reuters:
Malaysia Airways’ guardian has warned the leasing corporations that the Khazanah state fund will cease financing the group and pressure it by way of a liquidation course of if restructuring talks with the lessors are unsuccessful, based on a letter seen by Reuters .
The warning from Malaysia Aviation Group (MAG), the holding firm of the state airline, raises the stakes in negotiations for a monetary restructuring referred to as “Plan A” and units out an alternate plan to divert funds to a sister airline unit referred to as Firefly.
“Within the occasion that Plan A fails, the shareholder (Khazanah) will cease financing MAG and activate MAG’s liquidation / liquidation course of,” based on the doc, the content material of which was confirmed by six individuals aware of the matter.
The sources, who declined to be recognized as a result of sensitivity of the matter, say Malaysia Airways is negotiating reductions with lessors by way of a restructuring plan that it seeks to implement by way of a court docket course of in the UK.
Malaysia Airways has not been run as a business firm, not like its Singaporean counterpart, of which it was beforehand a component, however quite what the federal government needed at one level.
In some unspecified time in the future, the airline determined to downsize long-haul routes solely to reintroduce them subsequent yr. It at present has 25 plane of the 88 in storage, ready for higher occasions.
There are similarities between what is going on with Thai Airways and Malaysia Airways. Each are state-owned and chronically lose cash.
I am undecided if plane lessors at present produce other choices than to simply accept decreased funds or to return the planes and park them in a desert.