MALAYSIA Airlines Bhd may find a new lease of life in a new outfit if creditors reject its restructuring plan, said sources.

Sources familiar with the matter said that MAB’s shareholder, sovereign wealth fund Khazanah Nasional Bhd, could restart operations of the airline under a new carrier if creditors reject the proposed restructuring plan.

“That is in the plan (to restart operations under a new outfit) if all fails. If lessors won’t budge, Khazanah will cave in (to shut down MAB),” a source told The Malaysian Insight.

Reuters reported on October 10 that the plan has been rejected by a group of aircraft leasing companies.

The companies that supposedly represent 70% of the aircraft and engines leased to MAB said they will challenge the “inappropriate and fatally flawed” plan, according to sources and a letter from a London law firm sighted by Reuters.

Meanwhile, The Edge Weekly quoted Malaysia Aviation Group (MAG) chief executive officer Capt Izham Ismail as saying that the group has no choice but to shut down Malaysia Airlines if lessors decide against the restructuring plan.

Izham said the restructuring plan was in a very late stage and the airline needs its creditors and lessors to make a decision by October 11 (yesterday).

He also hinted of a Plan B without divulging much detail.

The Malaysian Insight has reached out to Khazanah for comments.

Malaysia Airlines said earlier this month that it was undertaking an “urgent” restructuring exercise which entailed renegotiating with lessors, as it saw little sign of the Covid-19 pandemic abating.

Meanwhile, the National Union of Flight Attendants (Nufam) said in a statement yesterday that airlines could always minimise the impact of losses instead of opting to shut their business completely.

“Does the government really want to see more unemployment of workers like what they saw in the past? Will they want to see the same MAS scenario back in 2015?

“It will cause more damage to the people than good, especially where jobs are harder to find,” it said.

Nufam said shutting down Malaysia Airlines will do no party any good.

It also urged the government to set up a special committee for the aviation sectors to help protect the airline industry and its human resources.

The committee must include unions and workers’ representatives, it added.

Khazanah embarked on a 12-point turnaround plan in 2015 to resuscitate the ailing flag carrier.

It also injected RM6 billion to bail out the bleeding airline.

Prior to the 2014 turnaround plan, MAB received RM17.4 billion in several bailout attempts.

The turnaround plan entailed MAS being delisted from Bursa Malaysia and its operations, assets and liabilities transferred to a new company, now known as MAB.

As part of its restructuring exercise, manpower was reduced to 14,000, after 30%, or 6,000, staff members from the old company were let go.

MAB was supposed to return to the black by end of 2017, however it has yet to show profit. – October 12, 2020.