Malaysia's sovereign wealth fund Khazanah will create a restructuring plan for Malaysia Airlines (MAS) in the coming 12 months.

According to Malaysian state news agency Bernama and other local media, the plan was announced by Khazanah Nasional managing director Azman Mokhtar on the sidelines of a conference aimed at attracting investment to Malaysia.

He is reported as saying that “all options” are being considered. "At this moment, we are not prepared to say which option yet. But suffice to say, a lot of work has been done."

Mokhtar indcated that any plan will need to improve the Oneworld carrier's leadership and corporate culture.

"All three areas obviously need to be consolidated. Where the question of leadership and management is concerned, this area too we will seek to improve over time," said Azman.

Khazanah holds a direct 14% stake in MAS. It also holds 52.3% through government holding company Penerbangan Malaysia, which itself resulted from a financial restructuring of MAS in 2002. Another 10.7% of MAS is held by Citigroup nominees, and the balance by other shareholders.

He added that the carrier may reduce flights in order to cut losses. One positive sign he pointed was the carrier’s load factor of 81% in 2013.

Azman also says that MAS still has a key role to play in the country’s development, appearing to rule out the prospect of closing the struggling carrier.

This year has emerged as the most challenging in MAS’s long and generally unprofitable history. The tragic disappearance of flight MH370 with 227 and 12 crew on 8 March was extremely damaging to the carrier’s reputation and hurt forward bookings. Chinese bookings were extremely hard hit owing to the fact that most of the passengers on the Boeing 777-200ER aircraft were Chinese nationals.

The carrier also faces continued pressure from AirAsia and Malindo Air on domestic routes, and increasing competition from AirAsia X on international routes. In addition, it has been hurt by a weaker Malaysian Ringgit.

MAS posted a pre-tax loss of MYR439 million ($136 million) for the quarter ended 31 March.

Source: Cirium Dashboard

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