Malaysia Air­lines: No need for ex­tra fund­ing

> Na­tional car­rier is meet­ing all the tar­gets set by Khaz­anah Na­sional, says CEO

The Sun (Malaysia) - - SPEAK UP - BY EVA YEONG

KUALA LUMPUR: Malaysia Air­lines Bhd (MAB) does not need ex­tra fund­ing from its sole share­holder, Khaz­anah Na­sional Bhd, said its CEO Peter Bellew.

“We’re not look­ing for any­more fund­ing. We have an agreed pro­gramme with Khaz­anah. We’re meet­ing all the tar­gets Khaz­anah set. If we can, I’m go­ing to try to get the plan ex­e­cuted a lit­tle bit ear­lier than we had planned,” he told re­porters at the an­nounce­ment of a part­ner­ship with Liver­pool Foot­ball Club (FC) yes­ter­day.

Un­der the 12-point MAS Re­cov­ery Plan (MRP), Khaz­anah is to in­ject up to RM6 bil­lion into MAB on a stag­gered ba­sis sub­ject to the ful­fil­ment of re­struc­tur­ing con­di­tions.

Re­call that the delist­ing of MAS OldCo was done at a cost of RM1.4 bil­lion and the re­struc­tur­ing and re­trench­ment costs amounted up to RM1.6 bil­lion while the re­main­ing RM3 bil­lion cap­i­tal is to be in­jected pro­gres­sively from 2014 till 2016.

Bellew said the turn­around plan is go­ing well and it is aim­ing to in­crease its load fac­tor to 80% in the next 18 months. The air­line’s load fac­tor was 71-73% in the last few months.

MAB, which aims to in­crease flight fre­quen­cies to Bei­jing and Shang­hai as part of its ex­pan­sion plans in China, ex­pects to dou­ble its av­er­age seat kilo­me­tres (ASKs) to China in the next 18 months.

“We’re in the process of ap­ply­ing for more slots (to those air­ports). We will be an­nounc­ing sig­nif­i­cant ex­pan­sion to China in the next month or so,” Bellew said, adding that China con­trib­utes 5-6% to its over­all ASK.

Com­ment­ing on oil prices, Bellew said they are ex­pected to go well over US$60 per bar­rel in the next 12 months and move to­wards US$70. He said MAB is cur­rently hedg­ing at about US$65. “We hedge 12 months in ad­vance and we try to hedge at least for a quar­ter to 12 months in ad­vance, about 60% (is hedged). That’s the tar­get, 60-70%.”

As out­lined un­der the MRP, MAB aims to re­turn to prof­itabil­ity by the end of 2017 and to relist within three to five years, that is, be­tween end-2017 and end-2019. It has been re­ported that Bellew is look­ing to relist some­time in March 2019.

MAB’s deal with Liver­pool FC sees the car­rier be­com­ing the UK foot­ball club’s of­fi­cial global air­line part­ner. The deal, for three years, ini­tially, pro­vides var­i­ous ben­e­fits, in­clud­ing brand ex­po­sure, for MAB.

Bellew said the in­vest­ment size for the deal is less than 10% of MAB’s an­nual ad­ver­tis­ing and pro­mo­tion bud­get.

Bellew says Malaysia Air­lines aims to in­crease its load fac­tor to 80% in the next 18 months.

Newspapers in English

Newspapers from Malaysia

© PressReader. All rights reserved.