Malaysia Airlines aircraft

The Malaysian Government’s investment branch Khazanah Nasional has proposed the acquisition of the remaining 30% of the Malaysia Airlines for $437m as part of its efforts to restore the struggling company by privatising it.

The decision follows two consecutive disasters this year.

Khazanah, which already owns 69.4% of Malaysia Airlines System (MAS), will now be able to begin the steps to de-list the airline from the Malaysian stock market, further enabling drastic changes in the company with few regulatory constraints.

In a statement, Khazanah said: "Nothing less will be required in order to revive our national airline to be profitable as a commercial entity and to serve its function as a critical national development entity.

"In this regard, today’s proposal for de-listing represents the first stage of the restructuring scheme.

"Nothing less will be required in order to revive our national airline to be profitable as a commercial entity and to serve its function as a critical national development entity."

"Further, Khazanah is in the final stages of completing the overall restructuring proposal, and upon due process and approvals from the relevant authorities, regulators and the special shareholder, the minister of finance incorporated, we envisage that additional detailed plans will be announced by the end of this month."

As a first step in a restructuring effort aimed at reviving it to financial strength, the airline may also implement layoffs and board modifications.

Malaysian Prime Minister Najib Razak said: "This is the first step needed to return our national carrier to profitability.

"The government and Khazanah are in the final stages of completing a comprehensive and holistic restructuring plan.

"With due process and following the relevant approvals, we expect that a detailed plan will be announced before the end of August."

The recent crashes of flight MH370 and the MH17 jet over Ukraine have greatly impacted Malaysia Airlines’ financial status. The airline continues to struggle despite four restructurings in 12 years.

Image: Boeing Next-Generation 737-800 aircraft in Malaysia Airlines livery. Photo: courtesy of Boeing photo.

Defence Technology