Khazanah Nasional says will continue supporting ‘cash positive’ Malaysia Airlines till 2025
KUALA LUMPUR, March 21 — Khazanah Nasional Bhd today said it will continue to support Malaysia Airlines Berhad (MAB) for the next two years even though the national carrier has seen its cash flow in the black for the first time since the Covid-19 pandemic.
Khazanah managing director Datuk Amirul Feisal Wan Zahir is hopeful the airline can continue improving its business practices and prioritise customers moving forward.
“It's a blessing for us that they're cash positive. They seized the moment during the crisis fixing the balance sheet and making sure there's a focus on making the whole airline profitable,” he said in a news conference here.
He said the plan is still on for Khazanah to support MAB until 2025.
He added that the airline has used RM1.3 billion so far, from the total RM3.6 billion in new capital it was awarded back in 2021.
“In order to have sustainable business we need to look at the customer experience. It has to be the best and for that it requires investment and this is where we will continue to support them.
“As for foreign investments, I would like them to be in a stronger position. Get the airline steady and then we may see them form alliances with other airlines,” he said, referring to MAB.
Amirul declined to give a timeline on when Khazanah felt MAB would be able to make a full turnaround when asked.
He said he preferred not to put a timeline on it as the business space is still recovering from the effects of the pandemic.
He said the key is to ensure MAB is sustainable.
He said he felt buoyed by the fact the airline has been able to return to the black.
He said there are plans in place to purchase replacement aircrafts which will increase the volume of air flights for MAB.
“We're not being sequential, we prefer dynamic thinking. We have a turnaround plan in place and want to make sure they have the assets to get replacement aircrafts. Let the airline fix itself and we will continue to monitor the situation,” he added.
Khazanah is the sole shareholder of Malaysia Airlines.
In 2020, then finance minister Datuk Seri Tengku Zafrul Abdul Aziz was reported saying Khazanah had injected a total of RM28 billion into MAB at that point.
The latest commitment follows MAB’s RM16 billion debt restructuring plan that was given the green light by the UK High Court in 2021.
To recap, on February 22, 2021 the High Court of Justice of England and Wales sanctioned a scheme of agreement between Malaysia Aviation Group's (MAG) leasing entity, MAB Leasing Ltd, and the majority of MAG’s aircraft operating lessors following unanimous support from the lessor.
This represents an important component of the airline's wider restructuring exercise that MAG will achieve a reduction in liabilities of over RM15 billion.
Prior to that MAB was suffering billions in losses due to its lacklustre and expensive flights which was further exacerbated when the Covid-19 pandemic hit.
The airline ran the risk of bankruptcy before it was bailed out by Khazanah.