Kuala Lumpur: Malaysia Airlines Bhd. is prepared to shut down if ongoing talks with leasing companies about a restructuring plan fail, The Edge Malaysia cited the national carrier’s chief executive officer as saying.
A “sizable” number of creditors support the company’s plan, some are against it and others are still undecided, Izham Ismail told the business weekly in an interview Saturday.
The company needs “to get the 50:50 (undecided) ones with those who have agreed,” Izham was cited as saying in the publication.
Sunday is the deadline for creditors to decide, after which Malaysia Airlines will choose whether to proceed with the restructuring plan or execute “Plan B,” which may involve the passing of its air operator’s certificate to a new carrier under a different name, he added.
The company is working hard to get the cooperation of those involved so it can “move on to the next phase in making the business sustainable,” Malaysia Airlines said in a emailed statement Sunday. “The restructuring involves several stages and we will not be able to share more information at this point in time,” it said.
Malaysia Aviation Group, the holding company for the Malaysia Airlines, is pleased with the level of support it has received from lessors and is “confident that there are appropriate legal mechanisms available should that support not be universal,” it said in a statement Saturday.
Reuters reported on Friday that a group of leasing companies rejected the restructuring plan put forward by Malaysia Airlines, citing people familiar with the matter and a letter from a London law firm.
The airline, wholly owned by Malaysia’s sovereign wealth fund Khazanah Nasional Bhd., announced earlier this month that it had embarked on an “urgent” restructuring exercise that involves renegotiating with lessors, as it sees little sign of the pandemic easing.
The company has cut salaries for management and pilots, offered unpaid leave to employees, and has sought payment deferrals and contract renegotiations since March. It is now reviewing its network and fleet plans.
Malaysia Airlines was taken private by Khazanah in 2014 following the disappearance of one aircraft and the loss of another four months later.
Flight MH370, traveling from Kuala Lumpur to Beijing, disappeared on March 8 of that year with 239 people on board. Multinational searches have failed to find the plane.
On July 17, Flight MH17 from Amsterdam to Kuala Lumpur was shot down by a missile allegedly fired from area controlled by pro-Russian rebels near eastern Ukraine. Four defendants went on trial for the incident in absentia in March this year after an international investigation that lasted almost six years. –Bloomberg
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