Malaysia Airlines (MAS) is to undergo sweeping restructuring that will see the government taking over all its assets and its loss-making domestic passenger operations. Cargo and international operations will be spun off as a new company, temporarily named Newco.
MAS is majority state-owned, and will cede its Kuala Lumpur Stock Exchange listing to the Newco subsidiary. After the restructuring, existing shareholders will not be exposed to huge losses from domestic passenger operations, although they will have no ownership of the carrier's subsidiaries or associate companies.
Malaysian prime minister and finance minister Mahathir Mohamad says the new company will only lease aircraft from MAS.
MAS claims that the reorganisation will allow private investors to put money in more healthy international operations through Newco, while the state-owned domestic arm "will be able to build on domestic policy imperatives and continue to support government policy and the national interest".
MAS has lost money for each of its past four financial years to 31 March and is on course for a fifth consecutive year in the red.
Last year the carrier was renationalised in a controversial deal that left the ministry of finance with a 29% stake, other government agencies with 54% and the public with 17%.
Source: Flight International
