Khazanah Nasional Bhd has pumped another RM300 million into the country’s flag carrier Malaysia Airlines Bhd, via its holding company Malaysia Aviation Group Bhd (MAG), taking the total amount of capital injected so far this year to RM800 million.
The Edge Financial Daily reported that in March this year, Khazanah had pumped RM500 million into MAG, which also manages Firefly Sdn Bhd, MASwings and MAB Kargo Sdn Bhd.
Citing an unnamed spokesperson from Khazanah, the report said that the RM800 million capital injection into MAG is only part of the initial RM6 billion approved funding for the fledgling airline, under the MAS Recovery Plan (MRP) which was announced five years ago.
“In the interim, MAG will continue to require funding to operate on a business-as-usual basis while making efforts in enhancing its customer experience and containing losses,’’ the spokesperson said.
However, the target was missed amid several setbacks, namely stiff competition, rising fuel prices, unfavourable foreign exchange rates, as well as crew shortage.
The Edge Financial Daily cited Malaysia Airlines’ filings with the Companies Commission of Malaysia (CCM) as showing an increment in net loss by 85 per cent year-on-year, to RM812.11 million for the financial year ended December 31 2017.
The report said that the airlines lost RM2.35 billion between 2015 and 2017, adding that despite its announcement that it ended 2018 with a lower year-on-year loss, it did not reveal the said amount, and is yet to file its financial statement for the 2018 financial year, with the CCM.
On the evaluation of parties interested to takeover Malaysia Airlines, the anonymous Khazanah representative reportedly said that several parties have expressed their keenness in MAG.
“Khazanah will evaluate all serious offers, specifically their capabilities financially and from the execution point of view. At this stage, we cannot comment on the process and progress of the evaluation,” the spokesperson said.
The Edge Financial Daily reported that MAB chief executive Izham Ismail had last month unveiled a new long-term business plan (LTBP) that is currently awaiting approval from Khazanah’s board of directors.
The plan, if successful, would see Malaysia Airlines achieving financial break-even by 2022 and generating enough income to cover the cost of capital for its operations two years later, the report said.
The Edge Financial Daily said that the LTBP consists of four pillars, which includes rightsizing the airline’s fleet of Airbus and Boeing aircraft and network expansion that is focused on the Asia-Pacific, with the three other pillars being the aim of providing a premium customer experience, having a partnership strategy and diversifying the airline’s revenue.
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