MALAYSIA Airlines is seeing softer demand across its network after the movement-control order (MCO) was reinstated on January 13.

“At present, Malaysia Airlines is operating at 85% reduction of our pre-Covid-19 network capacity, mostly to facilitate essential movement to ensure global supply chains are maintained for the most time-sensitive materials,” a spokesman for the national carrier told The Malaysian Insight.

The airline also has plans to restore a significant proportion of its international schedule by year-end.

This includes increasing long-distance flights from Kuala Lumpur to the UK, Australia and New Zealand. 

“As a group, Malaysia Aviation Group (MAG) has continued to fulfil its duty as the national flag carrier to ensure domestic and international air connectivity, including to the rural areas of the country and supporting vital national supply chains,” the spokesman said.

By year-end, Malaysia Airlines plans to restore a significant proportion of its international schedule with an increase in long-distance flights from Kuala Lumpur to the UK, Australia, and New Zealand, she added.

Malaysia Airlines is currently the only airline operating non-stop flights between the UK and Malaysia.

During MCO 2.0, which came into effect on January 13, scheduled and unscheduled flights, cargo services, general aviation – such as business and private jet operations – as well as helicopters are allowed to operate.

From January 16 onwards, passengers were required to get police permits for interstate travel via domestic flights.

Those without a police permit would be denied entry to the airport terminal.

On the business front, the airline’s parent company, MAG, said on January 21 that the company had successfully obtained approval from a UK court to carry out a major component of its restructuring plan. 

A small group of creditors had yet to agree on the debt restructuring plan.

The company’s aircraft leasing subsidiary, MAB Leasing Limited (MABL) had issued a practice- statement letter to certain creditors, notifying them of its intention to file a scheme of arrangement according to the UK Companies Act 2006.

The hearing for this was held on January 20 and the court approved for MABL to convene a meeting of creditors to consider the proposed scheme. 

“The outcome of the creditor meeting will be reported back to the court at the sanction hearing set for February 22,” MAG said in a statement.

“It is expected that the UK court process and the wider group restructuring exercise will conclude by the end of Q1 2021.”

MAG will continue working with its relevant stakeholders with a view of completing the numerous transactions as soon as possible, it added.

The group has been in negotiation with 40 creditors and key suppliers since last September.

MAG is seeking creditors to take on a haircut on their outstanding debt. 

The restructuring plan entails estimated liabilities of RM16 billion. – January 30, 2021.