Due to the pandemic, the air travel industry has faced many losses in jobs and revenues, making it one of the bleakest sectors at the moment. Lately, in light of the possibility of Malaysia Airlines (MAS) being grounded permanently, Khazanah Nasional Bhd has revealed that the institution is thinking of funding low-cost carrier airline, Firefly.
According to NST, Khazanah is looking to Firefly to become the new national carrier but would prefer Malaysia Airlines’ creditors to share the burden of the carrier’s restructuring, rather than going down the liquidation path.
In another report by Berita Harian, Khazanah managing director Datuk Shahril Ridza Ridzuan said that besides Firefly having the potential to become the national airline, it also helps the short-haul airline to expand its operations, thus continuing air connectivity for Malaysia.
A source who is involved with the negotiations of the creditors also disclosed to NST that Khazanah might opt to reboot Malaysia Airlines’ air operator licence by transferring it to other company belonging to the fund.
Due to the confidentiality of the negotiation, Malaysia Airlines could not disclose any information and update the outcome of the discussions with its lessors and creditors but is now focusing their lessors, creditors and key suppliers to help the airline achieve a mutual agreement to make restructuring work as they are prepared to start afresh if the plan fails.
A Malaysia Airlines spokesperson also commented that Khazanah was supportive of the restructuring efforts, currently undertaken by Malaysia Aviation Group (MAG), to create a pathway to a financially self-sustainable aviation company post-Covid-19.
“If this effort proves unsuccessful, they will need to evaluate options as we advance on how to maintain connectivity for Malaysia. Additional support beyond November 2020 is conditional upon successful restructuring terms with all stakeholders,” said the spokesperson.
As of now, to help stabilise MAG’s cost base and ensure the sustainability of the carrier’s business, a mutual agreement would be needed between Malaysia Airlines and its creditors.
The spokesperson also added that the agreement will allow continuing support of the whole value-chain and balance our role as a contributor to the aviation industry, and subsequently, continue to be the flag bearer of Malaysia.