MALAYSIA Airlines Berhad (MAB) will need up to RM21 billion of public funds to stay in operation until 2025 without a strategic partner, Focus Malaysia reported.

The business portal said it sighted a memo that quoted the figure based on projections by Khazanah Nasional Berhad, which owns the national carrier.

Khazanah was providing its analysis on MAB’s proposed business plan for the 2019-2025 period.

It is not known when the memo was dated.

Focus Malaysia said the RM21 billion figure, or RM3.5 billion a year, is an estimate on the high side and includes purchases of new planes.

In the memo, Khazanah is said to have deemed MAB’s own estimate of RM10.3 billion needed to stay afloat as “overly optimistic”.

In its business plan, MAB reportedly said it expects to break even in 2022 and achieve financial stability in 2024.

But Khazanah’s view of the matter is that MAB’s plan had nothing to differentiate its business models with what has been done all this while.

The sovereign wealth fund also disagreed with MAB’s ability to achieve its projected 4% annual growth in revenue.

This doubt is based on the pattern of average growth at 1% a year from 2016 to 2018.

The airline would never break even at this rate, Focus Malaysia said, citing the memo.

It also reported that Khazanah felt MAB did not take into account additional funds needed to service a RM5.6 billion loan from special-purpose vehicle Turus Pesawat Sdn Bhd, used to buy six Airbus 380 planes and to finance operations.

Various airlines are said to have expressed interest in acquiring stakes in MAB. They include Qatar Airways, Japan Airlines and China Southern Airlines.

Khazanah took over MAB with a RM6 billion turnaround plan in 2014, after some RM17 billion of government funds spent before that in attempts to save the ailing carrier.

At the end of its financial year on December 31, 2018, MAB had made net losses of RM791.71 million, from RM812.11 million in 2017, while revenue grew slightly to RM8.74 billion, from RM8.67 billion the year before. – January 23, 2020.