Airline debt – whose problem is it anyway?

Malaysia Aviation Group Bhd (MAG), the parent company of Malaysia Airlines (MAS), announced a restructuring last week which did not come as a surprise. It supposedly had told creditors that Khazanah Nasional Bhd, its sole shareholder, was not prepared to pump more money into the airline if restructuring talks with lessors were not successful

DURING the 1986 economic crisis that led to the collapse of Pan-El Electric in Singapore, a banker told of how a Malaysian corporate bigwig threw a rescue plan back at lenders when confronted for repayment.

The corporate bigwig told the bankers that since the amount owed was large, the onus was on the banks themselves to come up with a restructuring plan for him to pay up – or he would have to fold up.