Malaysia Airlines might have to shut down if its lessors decide not to back its latest restructuring plan, said Izham Ismail, Group CEO, Malaysia Airlines. According to reports, a group of leasing companies have turned down the airline’s restructuring plan, which has brought the state carrier closer to a showdown over its future. Ismail said that the group would have “no choice but to shut it down” if lessors decide against backing the restructuring plan. “There are creditors who have agreed already. There are others still resisting, and another group still 50:50. I need to get the 50:50 ones (on board) with those who have agreed. I understand quite a sizeable amount of creditors have agreed.”
He revealed that the plan was to restructure the airline’s balance sheet over five years, achieving break-even in 2023 on the assumption that demand in the domestic and Southeast Asian markets returns to 2019 levels by the second and third quarters of 2022. Under this plan, a fresh cash injection will be required from its major shareholder, the state fund Khazanah Nasional, which will be user to aid the airline for the next 18 months. According to a report, lessors who claim to represent 70% of the airplanes and engines leased to the group, have called the plan ‘inappropriate and fatally flawed’ and pledged to challenge it.
Izham has revealed that the lessors will need to come to a decision by Sunday, so that the airline can decide whether to proceed with its restructuring plan or “execute Plan B”, which could involve shifting Malaysia Airlines’ Air Operator’s Certificate (AOC) to a new airline under a different name, or using the certificates of sister airlines Firefly and MASwings.