KUALA LUMPUR – Sovereign wealth fund Khazanah Nasional Bhd could direct funds to its sister airline Firefly and turn the low-cost carrier into the next national airline if Malaysia Airlines Bhd (MAB) shuts down, Malay daily Berita Harian (BH) reported today.
Khazanah managing director Datuk Shahril Ridza Ridzuan told BH that the fund could not continue financing MAB, which lacked a strong financial position and often registered losses.
If the status quo remained, Khazanah would “have to dispose of its holdings in other strategic assets or increase debt,” Shahril said.
Firefly, which operates a fleet of 12 twin turboprops, mainly within the country, is currently a fully owned subsidiary of Malaysia Aviation Group (MAG), the parent company of MAB.
Khazanah, the sole shareholder in MAG, will discuss next steps when the outcome of restructuring talks becomes clearer, BH said.
Reuters recently reported, citing an MAG letter sent to lessors, that Firefly would obtain narrowbody planes and subsequently widebody aircraft from the market in a plan B scenario.
MAG warned that the flagship airline could be wound up if lessors did not agree to steep discounts.
Finance Minister Datuk Seri Tengku Zafrul Abdul Aziz said last week the government would not provide financial support to Malaysia Airlines and that any aid was for Khazanah to address.
Winding up Malaysia Airlines is expected to cost the government and Khazanah roughly RM11.7 billion. – The Vibes, October 14, 2020
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