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KUALA LUMPUR, Oct 2 — Malaysia Airlines Bhd (MAB) confirmed today that it has contacted all its creditors and suppliers for a restructuring of the flag carrier’s debt with them amid persisting challenges from Covid-19.
The airline said its group’s long-term business plan (LBTP) had in 2019 been showing positive signs, but this was derailed when the world-stopping Covid-19 pandemic emerged and disrupted the aviation industry along with most other sectors.
MAB said it was now forced to revise its LBTP but said the success of this would be contingent on the assistance and cooperation of all stakeholders including creditors and suppliers.
“It is intended that this restructuring exercise be completed over the next few months. However, if such an outcome is not possible, the group will have no choice but to take more drastic measures,” MAB said in a statement today.
The airline said that it was striving to ensure the continuity of its operations both for the interests of its passengers as well as the livelihoods of all workers that depended on it either directly or indirectly via supporting firms.
Malaysia Airlines pointed out that there did not appear to be any sign that the effects of Covid-19 on nations and the travel industry would abate soon, which denied it the opportunity to pursue its original plan for recovery.
It said it was aware that its status as the nation’s flag carrier meant its decisions would have major ramifications on the larger industry as well as to Malaysia.
“Hence it is committed to ensure that its restructuring exercise is duly implemented in a fair manner through any form of mechanism that is appropriate,” the airline said.
Malaysia Airlines financial situation deteriorated sharply in March when countries around the world including Malaysia began closing borders to try and contain the spread of Covid-19.
Group chief financial officer Boo Hui Yee said then that the airline was at risk of going bankrupt along with other carriers that have been forced to ground their entire fleets due to the border closures.
Close to home, the rival AirAsia Group has already embarked on two rounds of retrenchments in an attempt to stay afloat.