PETALING JAYA: Malaysia Airlines Bhd has clarified that it has not received any commitment by sovereign wealth fund Khazanah Nasional Bhd for a RM5bil funding.
The clarification from the national flag carrier was in response to a Bloomberg article stating that Khazanah was considering providing as much as RM5bil to Malaysia Airlines for it to survive the slump in bookings due to the Covid-19 pandemic, citing unnamed sources.
“Khazanah being our sole shareholder has been supportive of our efforts to address and cope with the impact of the Covid-19 crisis to Malaysia Airlines.
“As we are currently realigning our Long-Term Business Plan to the changing aviation landscape, we are in continuing discussions with Khazanah on the level of support needed, moving forward, ” it said.
“On our own, we have taken some hard measures to contain the impact of the crisis, which include undertaking negotiations with aircraft lessors and vendors to manage payments and financial obligations as well as offering unpaid leave and inducing salary cut of 10% to 35% among employees in order to sustain the company’s cash flow.
“This is to protect those in the lower income bracket and to avoid possible job cuts in our effort to trim costs further.
“A number of business investments have been put on hold in view of the crisis. We’ve also proactively removed capacity to manage our cost effectively, ” it added.
According to the Bloomberg article, with the injection from Khazanah, Malaysia Airlines would use the fresh capital to resume some operations it has suspended. If it is approved, the cash infusion could happen in the coming weeks, the news agency reported.The report noted a representative for Malaysia Airlines said that it was in ongoing discussions with Khazanah, which has been supportive of its efforts to cope with the impact of the Covid-19 pandemic, but that no specific amount of funds has been committed to the carrier. A Khazanah representative declined to comment, it said.
Bloomberg noted Malaysia Airlines, which has been struggling to turn around since it was taken private by Khazanah in 2014, would join carriers around the world in receiving a lifeline from their respective shareholders.
Governments worldwide have pledged more than US$85bil to prop up airlines after the coronavirus pandemic wiped out travel demand and grounded fleets.
The Malaysian carrier is hoping to rebound from the near-halt in air travel brought on by Covid-19, and will undoubtedly look different when it emerges.
It has named a new chairman, the president and CEO of national energy company Petroliam Nasional Bhd, whose appointment will be effective July 1.
Tan Sri Wan Zulkiflee Wan Ariffin has already turned around one national champion in Petronas, which faced a commodity price rout beginning in 2014.
Malaysia Airlines, has canceled flights, deferred non-critical spending and cut costs since the onset of the crisis. In March, Malaysia’s government explored the possibility of bailing out its domestic airlines, people with knowledge of the matter told Bloomberg News.
Last year, Khazanah asked the flag carrier to come up with a strategic plan to help it compete and deliver better returns after it failed to meet deadlines for two profitability targets. Khazanah also hired Morgan Stanley to explore strategic options for the airline.
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