NICHOLAS IONIDES / SINGAPORE
Malaysia Airlines (MAS) is putting the finishing touches to a sweeping revamp that will cover the separation of loss-making domestic operations from more healthy international operations. It is continuing to hold talks with various parties on planned asset sales.
The heavily indebted carrier was renationalised last year, and early this year announced plans for a wide-ranging restructuring. Airline sources in Malaysia say the final details are now being worked out and the market should be updated on the plans soon.
The first phase involves a mammoth cash-raising effort that covers the sale to the ministry of finance of eight widebody aircraft and a number of properties, all of which will be leased back. Regulatory approval was secured in May for the aircraft sale/lease-backs, which will raise MAS more than 3.8 billion ringgit ($1 billion).
At the same time the airline is finalising plans for its domestic passenger operations to be separated from international operations. Under the revamp, expected to be completed later this year, a new company will take over the marketing of MAS's passenger and cargo capacity on international routes, as well as cargo capacity on domestic routes. The new company will also take over MAS's stock exchange listing, while unlisted domestic operations and subsidiary operations will stay with the state.
MAS, meanwhile, is continuing to hold talks on the sale of a majority stake in its catering arm to a consortium led by LSG Sky Chefs. MAS now says it still has "an intention to dispose of at least 70%" of the unit, but no agreement has yet been finalised. The carrier wants to sell all of the operation to the consortium, which is holding up a firm deal.
The sale of non-core assets forms a key part of the carrier's restructuring efforts. Early in July MTU acquired the airline's 31.1% stake in MTU Maintenance Malaysia, giving the German aero-engine company full ownership of the compressor blade repair centre in Kuala Lumpur.
Source: Flight International
