Khazanah Nasional says Malaysia Airlines is on track towards becoming a sustainably profitable commercial airline.
In its fourth quarterly update on the Malaysian flag carrier's recovery plan, Khazanah says fine-tuning of the carrier’s business plan is “ongoing”, and that more than 100 projects have been identified to "reset the operating business model".
These projects involve improving revenue, optimising cost and putting in structures to facilitate an effective restructuring of the airline. While steps have been taken to suspend non-profitable routes, further route rationalisation is also being considered.
Khazanah adds that it will soon disburse MYR1.3 billion ($306.8 million) in condition investment funding to the airline to pay for termination packages of employees under a rightsizing exercise. Including this sum, Khazanah would have disbursed about MYR3.2 billion out of the MYR6 billion allocated for the restructuring effort.
The airline has also undertaken a review of its supply contracts, with deals identified for renegotiation, termination or novation. Among large supply contracts that have been renegotiated include new catering agreements with Brahim’s Airline Catering.
“The review and renegotiation of supply contracts are crucial towards setting the airline on the path to recovery and sustained profitability,” says Khazanah.
In addition, around 98% of employees who were offered employment with the new company have accepted the offers. Of the airline's 13,000 workforce, 9,000 are on permanent employment while the rest are on short-term contracts.
Khazanah’s update follows the carrier’s new air operator’s certificate from Malaysia’s Department of Civil Aviation, in which it effectively transited to Malaysia Airlines Berhad on 1 September.
Source: Cirium Dashboard