When sovereign wealth fund Khazanah Nasional Bhd unveiled a turnaround plan for the country’s flagship carrier in August 2014 that saw the shut down of Malaysian Airline System Bhd and rebooted into a leaner, smaller Malaysia Airlines Bhd, there were high hopes for it to achieve similar success as Japan Airlines (JAL).
Declared bankrupt in 2010 after a decade of losses, JAL managed to turn around its fortunes and return to the stock market in less than three years. This followed a government-backed restructuring under which the airline shed a third of its workforce, cut unprofitable routes and received support from a quasi-government entity, which provided ¥300 billion in fresh capital.
It is now four years after Khazanah put into motion a five-year plan for Malaysia Airlines to achieve sustained profitability by the end of 2017 and to relist between then and the end of 2019. The airline has also used up more than half of the RM6 billion capital injected by its sole shareholder but a turnaround remains elusive.
Malaysia Airlines is still in transformation mode, group CEO Izham Ismail tells The Edge in an interview.
Buffeting the national carrier are rising fuel costs, foreign exchange volatility, a weak pricing strategy and pilot shortage.
To know more about what transpired in the interview, pick up the latest issue of The Edge.