Malaysia Airlines says no US$300m funding from govt

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"Khazanah Nasional Bhd, being its sole shareholder, has been supportive of its efforts to address and cope with the impact of the Covid-19 crisis although no additional funding has been committed."

KUALA LUMPUR (July 28): Cash-strapped Malaysia Airlines Bhd says today it has not received any funding from the government.

It was responding to The Edge Malaysia Weekly's report on July 20, quoting sources, that Malaysia Airlines had secured US$300 million (RM1.28 billion) in new funding to help see it through the Covid-19 crisis.

"Khazanah Nasional Bhd, being its sole shareholder, has been supportive of its efforts to address and cope with the impact of the Covid-19 crisis although no additional funding has been committed," the national carrier said in a statement.

In the report, Khazanah neither confirmed nor denied that the airline was getting new funding, but that "with the Covid-19 situation still developing, Malaysia Aviation Group Bhd’s (MAG) capital requirements are fluid". Malaysia Airlines also did not reply to requests for comment then.

MAG is the holding company for Malaysia Airlines and other subsidiaries such as FlyFirefly Sdn Bhd, MASwings Sdn Bhd, MAB Engineering Sdn Bhd and MAB Kargo Sdn Bhd.

In today's statement, Malaysia Airlines said when MAG launched its long-term business plan (LTBP) in early 2019, the group achieved better overall net income after taxes (NIAT) compared to 2018, which was 18% ahead of budget while the group's revenue grew 7% year-on-year.

"Malaysia Airlines was merely 3% shy of targeted passenger revenue for 2019, having met second-half target after a weak first half.

"Most subsidiaries under MAG also performed better than target and as a group, it managed to achieve 65% of target in cost savings," the airline said.

It added that MAG was set to continue the momentum in 2020 but the Covid-19 pandemic caused an unprecedented lockdown across the globe, forcing airlines to halt operations and ground almost all their fleet for most of March to June this year.

"The financial impact is tremendous and MAG has wasted no time in realigning its LTBP to the changing aviation landscape," Malaysia Airlines said, but did not elaborate.

The loss-making national carrier has cut capacity by 96% and grounded almost its entire fleet amid global travel restrictions. In March, Malaysia Airlines warned that it might go bust without government support, given the almost-nil revenue after the closure of the national airspace. The airline, which employs 13,000 employees, has refrained from downsizing its workforce so far.

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