In an effort to reduce its massive debt, Malaysia Airlines (MAS) is conducting sale and lease-back deals on eight widebody aircraft to raise more than 3.8 billion ringgit ($1 billion).
MAS, renationalised early last year under a debt of around 10 billion ringgit, said in January that it planned a sweeping asset sale programme under which the government would buy aircraft and properties and lease them back to the airline.
The carrier has now won regulatory approval for the main stage of the cash-raising plan, covering the sale of three established Boeing 747-400s, plus three new 747-400s and two new 777-200ERs. The aircraft will be sold to a special-purpose company called Aircraft Business Malaysia, set up by the ministry of finance, and leased back.
The proceeds will be used to repay Japanese loans and help in the acquisition of the five new Boeing aircraft.
MAS is also planning to sell to the government and lease back its headquarters building in Kuala Lumpur as well as offices at Kuala Lumpur's old Sultan Abdul Aziz Shah Airport at Subang and buildings at the flagship Kuala Lumpur International Airport at Sepang. Regulatory approval for the plan is expected shortly.
The airline has been in financial difficulty for years and recently reported its fifth consecutive year of losses for the 12 months ended 31 March.
Meanwhile, work continues on a sweeping corporate structure overhaul that will see the carrier's relatively healthy international arm separated from loss-making domestic passenger operations, a new company take over the marketing of MAS's passenger and cargo capacity on international routes and cargo capacity on domestic routes, and the company's listing on the Kuala Lumpur stock exchange. Unlisted domestic operations and subsidiary operations will remain with the government.
Source: Flight International
