AviationSell or stall? Decision expected soon on airline’s future.

Crucial time ahead for Malaysia Airlines

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A challenging year ahead for Malaysia Airlines.
A challenging year ahead for Malaysia Airlines.

There has been some talk that Malaysia may shut down its national carrier, although Captain Izham said an equity investment – possibly by another airline group - would be his choice.

Malaysia’s sovereign wealth fund Khazanah Nasional Bhd is expected to make a decision within weeks on whether its wholly-owned subsidiary Malaysia Airlines Bhd should go ahead with its next turnaround plan, the national carrier’s chief executive, Captain Izham Ismail, told reporters at the IATA annual meeting in Seoul.

There has been some talk that Malaysia may shut down its national carrier, although Captain Izham said an equity investment – possibly by another airline group - would be his choice.

“Selling [part of] Malaysia Airlines is equivalent to having investors into the airline. I welcome these synergies because they will bring in new culture. However, selling a 100% stake in Malaysia Airlines is equivalent to shutting it down,” he told The Edge.

He indicated that the long-term business plan, if approved, would see Malaysia Airlines remaining as a premium or full-service airline.

“Moving forward, it is critical for Malaysia Airlines to embrace what is the current marketplace and how the market will evolve over the next five to seven years. Yes, Malaysia Airlines has a lot to catch up, but I am confident and I have the conviction that the new business plan would be able to make some inroads into the future of the airline.

“The new business plan would be able to reshape Malaysia Airlines and be more competitive by bridging the low-cost and premium markets,” he said.

The CEO said 2019 would continue to be challenging for Malaysia Airlines.

“My view is that Malaysia will continue to experience overcapacity, directly impacting our yield.  The supply [of aircraft] in the domestic market is currently 1.8 times more than demand.  The main challenge for us in 2019 is fuel and foreign exchange (forex).  The current trade issues will drive fuel and forex to be erratic,” he added.

Meanwhile, Japan Airlines is expected to expand a joint venture (JV) with Malaysia Airlines Bhd to cover US rights and other Asian routes.

JAL president Yuji Akasaka said the JV was part of a deepening partnership be- tween the two, both members of the oneworld alliance.

“We believe what Malaysia Airlines is going through right now is similar to what Japan Airlines went through and we recovered from that situation,” the JAL president said.

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