Group managing director Datuk Capt Izham Ismail
PETALING JAYA: Malaysia Aviation Group (MAG), which operates Malaysia Airlines, will explore resuming dividend payments to its sole shareholder Khazanah Nasional Bhd in the next two years.
After unveiling MAG’s new roadmap for 2026-2030, outgoing group managing director Datuk Capt Izham Ismail said he is hopeful that the “conversation for dividend can happen”from 2026 or 2027.
“This is MAG’s aspiration. With regard to when exactly the dividend payment can start, I don’t know yet.
“This is because there will be a lot of capital that MAG will have to raise,” he told reporters after the launch of MAG’s Long-Term Business Plan 3.0 (LTBP 3.0).
Not including 2025, MAG has been making operating profits for three consecutive years, but it did not pay dividends to the Khazanah.
MAG group chief financial officer Boo Hui Yee added that the sovereign wealth fund is aware of the company’s plan for heavy capital expenditure investments over the next few years.
“We have to fund 20 widebody and 30 narrowbody aircraft going forward. Khazanah’s view is that MAG needs to be financially self-sustainable without going back to them for assistance.
“Therefore, dividend payment is not the top priority.”
As for MAG, Boo said the priority is to reinvest its profits back into the business.
MAG is also looking to raise funds from the capital market and it has been in talks with many financial institutions.
Boo said the group might raise funds via ringgit or foreign currency-denominated instruments including US dollar and euro to create a natural hedge with its receipts.
“Next year, we will be launching a request for proposals. We will see how the market responds.”
The year 2026 will set a new chapter for MAG as Izham will be retiring from his position as group managing director effective Jan 31, following a career spanning more than four decades with the company.
MAG has appointed Nasaruddin A Bakar as president and group chief executive officer – a new designation succeeding the former group managing director.
Under the LTBP 3.0 roadmap unveiled yesterday, MAG looks to double its revenue by the end of the decade, following its success in turning profitable and eliminating RM10bil in legacy debt.
The group has forecast a top line of RM24.6bil by 2030, up from RM13.8bil in 2024.
MAG group chief strategy officer Bryan Foong Chee Yeong told reporters that over 60% of top line growth would come from third-party revenue.
The group also expects to raise its operating profit margin to 9% by 2030.
In 2024, the operating profit margin stood at 0.9%.
On the current financial year, Izham said it would be a “profitable year but marginal.”
“This is because we have to spend a lot on aircraft maintenance and overhaul costs. We invested in customer experience, catering and many others.”
He said the group “endured the pain” this year to have more financial legroom from 2026.
Despite that, year-to-date till September, MAG’s passenger revenue was up 3%, cargo revenue up by 8% and other revenue increased by 17%.
Earnings before interest, taxes, depreciation and amortisation improved marginally by 2%, driven by stronger performance of aviation services such as maintenance, repair and overhaul, cargo, catering and Malaysia Airlines’ academy.
In the next five years, MAG aspires to expand its capacity by over 50% at an average annual growth rate of 8.5% and the continued fleet renewal, including investment in 40 A330neos, 43 Boeing 737-8s and 12 Boeing 737-10s.
This supports the ambition to operate a modern mainline fleet of 116 aircraft by 2035, up from 90 in 2026.
Izham said LTBP 3.0 marked a shift from stabilisation to scaled and disciplined growth.
“It sharpens our premium position and deepens the value we create across our broader aviation ecosystem.
“At the heart of this plan is a focused network and fleet strategy that positions us for the next horizon of growth, enabling us to serve customers with greater reach, efficiency and an elevated customer experience, and our ambition to see Malaysia Airlines ranked among Skytrax’s Top 10 Global Airlines by 2030.
“It is a bold aspiration, perhaps a distant dream to some, but one we are fully committed to realising by building on what we have achieved, accelerating where we are strongest and investing strategically to secure long-term, sustainable value for our customers, partners and the wider nation.”
According to Izham, the disposal of its loss-making low-cost carrier Firefly is an option on the table.
In July, it was reported that Firefly would cease its jet flight operations to and from Sultan Abdul Aziz Shah Airport in Subang. It was later moved to the Kuala Lumpur International Airport.
Izham said operating the jet flights from Subang “did not help the bottom line”.
“We will see how it performs at KLIA over the next few years, but if it goes south, then we have to make some drastic decisions in 2028 or 2029.”
There are three more years for the lease term of Firefly’s airplanes to expire.
