Prime Minister Mahathir bin Mohamad said that he reviewing options for the country's national carrier, the Malaysia Airlines. Due to the issues that the airline is facing right now, the Malaysian PM is looking for the right solution and he has been considering adding more funds, selling it off or closing it down completely.
This detail has emerged as Malaysia Airlines' performance in the last couple of years has been continuously going down. With the decline, the carrier was slapped with heavy loss in profits so its officials are trying to come up with a way to revive the company.
Bloomberg reported that the Malaysia Airlines' parent company, Khazanah Nasional, suffered from 6.27 billion loss in Malaysian currency, last year. Khazanah's managing director Shahril Ridza Ridzuan revealed that Malaysia's flagship carrier constitutes half of this amount and this tainted their funding company's portfolio.
Khazanah is also gathering options for the Malaysian airline and it was said that the firm's officials already held a board meeting for this. They are now exploring new markets in order to support the recovery scheme for the carrier.
Likewise, Prime Minister Mahathir also said during a parliament conference that a shut down is possible if Khazanah will not find a good solution. "It is a very serious matter to shut down the national airline," he said.
The PM added, "We will nevertheless be studying and investigating as to whether we should shut it down or we should sell it off or whether we should refinance it. All these things are open for the government to decide. We have to decide soon."
Mahathir's statement was in view of the fact that the carrier's profits are falling and it appears that a reversal would be difficult at this point. In response to the PM's comments, Malaysia Airlines imply that they are working on the next stage of its turnaround plan and they had been doing this since September of last year, Nikkei Asia reported.
In 2014, the operation of Malaysia Airlines was taken over by the Khazanah Nasional since it was struggling financially. When it was privatized, a restructuring plan was launched where the company aimed to get back its investment by boosting the carrier's profits within a 5-year timeframe.
However, the surge of budget airlines around Asia proved to be a stumbling block in Khazanah's plan due to the strong competition. In addition, the rising cost of fuel and foreign exchange volatility have made it impossible for the company to achieve its goal. Thus, in the end, Malaysia Airlines is now on the verge of closure.
