This article first appeared in The Edge Financial Daily on March 13, 2019

KUALA LUMPUR: Malaysia Airlines Bhd, which has missed its target to turn to profit in 2018, is at a crossroads as the government mulls over different options to plug further losses in the national carrier.

The government has not discounted closing down the airline, according to Prime Minister Tun Dr Mahathir Mohamad. “It is a very serious matter to shut down the national airline. We have to decide soon,” Dr Mahathir told reporters at the parliament lobby yesterday.

“We will nevertheless study the situation whether we should shut it down or we should sell it off, or whether we could refinance it. All these [options] are open for the government to decide,” he said.

Separately, Economic Affairs Minister Datuk Seri Mohamed Azmin Ali told reporters that the matter had been deliberated at the last Khazanah Nasional Bhd board meeting, which was attended by the management of Malaysia Airlines as well.

“Tun Mahathir has given his view on how we should manage the situation now. Both Khazanah and MAB (Malaysia Airlines) are taking up this matter seriously and hopefully they will find a solution for that,” he said.

Azmin added that one of the things that has been done in an effort to turn Malaysia Airlines around is the airlines’ recently launched special charter service Amal, which caters specifically for Haj and Umrah pilgrims to Saudi Arabia.

“Hopefully we can explore new markets from Indonesia and Thailand — I think that would support the progress,” he said.

The going concern of Malaysia Airlines came into question after its sole shareholder Khazanah had to make a massive impairment to its books that eventually caused the sovereign wealth fund to post an annual pre-tax loss for 2018, its first since 2005.

When asked about the prime minister’s comments to shut the airline down, Azmin said, “Well that is something that the management must look into.”

Tan Sri Mohd Sheriff Mohd Kassim, who was Khazanah managing director from 1994 to 2003, also said the government ought to really look into whether Malaysia still needs a national airline.

“There are a lot of people saying that we may have to re-examine whether we still need a national airline, and I think we should really look into it, if we really need a national airline,” said Mohd Sheriff on the sidelines of the Asian Strategy and Leadership Institute’s Malaysian Strategic Financial Outlook Forum yesterday.

“More and more people are talking about closing Malaysia Airlines down ... maybe that’s an option for the government to consider,” he added.