The parent of Malaysia Airlines is in discussions with sovereign wealth fund Khazanah Nasional about financial support, but has not received a funding commitment.
Addressing media speculation, the airline tells Cirium that parent Malaysia Aviation Group (MAG) “has not received any commitment by Khazanah Nasional, for a MYR5 billion ($1.17 billion) funding for it to survive the slump in bookings due to the Covid-19 pandemic”.
“Khazanah Nasional being our sole shareholder has been supportive of our efforts to address and cope with the impact of the Covid-19 crisis to MAG. As we are currently realigning our long-term business plan to the changing aviation landscape, we are in continuing discussions with Khazanah on the level of support needed moving forward.”
Other measures taken to mitigate the pandemic’s impact include negotiating with aircraft lessors and vendors to manage payments and financial obligations, as well as offering unpaid leave to employees and reducing their salary by 10-35% to sustain its cash flow. The airline has also reduced capacity to manage costs.
Bloomberg reported on 11 June that Khazanah could provide as much as MYR5 billion to the carrier. Citing unnamed sources, the report said the airline would use the cash to resume some operations.
Khazanah managing director Shahril Ridza Ridzuan, however, was quoted in local media denying the that funding discussions were taking place.
Quoted in Malay language newspaper Harian Metro, Malaysia finance minister Zafrul Abdul Aziz also indicated the country has no plans to provide funding to the airline, but rather will support the industry.
“The government and the ministry of finance has no plans to provide funding to help the carrier, but there is help for the airline industry,” says Zafrul.
Khazanah did not responded to Cirium’s request for comment.