Malaysian Government May Close Malaysia Airlines

According to reports, the Malaysian government is weighing up the future of Malaysia Airlines. Prime Minister Mahathir Mohamad has said he is considering whether to invest, sell or close the airline following a turbulent few years.

Mahathir Mohamad
Malaysian Prime Minister Mahathir Mohamad. Photo: Wikimedia

Few airlines have quite the checkered reputation of Malaysia Airlines. With two relatively recent fatal accidents and a less than healthy financial standing, the airline has had a lot to contend with over the past few years.

Now it seems the government is about ready to pull the plug, with options of selling, refinancing or closing Malaysia Airlines all under discussion. They are currently studying the airlines business plans and have said a decision on the future of the carrier will be made ‘soon’.

Speaking at a news conference in parliament, Mahathir said,

Featured Video:

“It is a very serious matter to shut down the airline. We will nevertheless be studying and investigating as to whether we should shut it down or we should sell it off or we should refinance it. All these things are open for the government to decide.”

Simple Flying reached out to MAS for comment. They responded with the following statement:

“Malaysia Airlines has been working closely with our shareholder, on the next phase of the turnaround plan, since last September. The timeline and framework was also shared with the Prime Minister in November.  Malaysia Airlines remains committed to the timeline given and will share the plans soon.”

Troubled times

The news of a potential Malaysia Airlines closure comes after a string of troubles at the Southeast Asian carrier.

In 2014, the flag carrier suffered a huge blow to its image after flight MH370 disappeared en route from Kuala Lumpur to Beijing. To date, no firm sign of the aircraft has been found, despite the largest aviation hunt in history being held over a three year period.

MH370 search area
The search for MH370 was the biggest in aviation history. Image: Wikipedia

Just months later, another flight was shot down over eastern Ukraine, killing all 283 passengers and 15 crew on board. The 777-200ER, flight number MH17, was travelling from Amsterdam to Kuala Lumpur when a Buk surface to air missile downed the aircraft.

Later that year, the airline was privatized, taken over by sovereign wealth fund Khazanah Nasional, and started work on a three year plan to improve profitability. However, the airline has continued to post heavy losses, and has failed to meet its targets, which analysts say has made it unsustainable.

The ‘Best Airline in Asia’

The news of the potential Malaysia Airlines closure comes hot on the heels of a notable success at the ITB awards on Monday. The carrier scooped the title of ‘Best Airline in Asia’ at the annual awards ceremony, hosted by the Pacific Area Travel Writers Association (PATWA).

Malaysia #malaysiairlines

Posted by Pacific Area Travel Writers Association on Thursday, March 7, 2019

The awards recognize those in the travel industry who ‘excel’ at promoting tourism. Winners are chosen by a panel made up of PATWA members as well as officials and travelers.

CEO of Malaysia Airlines, Izham Ismail, said that the carrier was ‘enormously proud’ to have won the title. He said that it was a mark of the improvements made at the airline over the past two years, including ‘new aircraft, products and digital innovations’.

“It is testament to our commitment to offering passengers a fantastic experience both in the air and on the ground,” – Izham Ismail, CEO Malaysia Airlines

Sadly, it seems that the accolade may have come too late to save Malaysia from closure. Simple Flying will keep you updated as this story develops.

  1. MAS Must close down indefinitely! The sooner the better! It’s a joke to even consider to refinance a really broken system! Why? Because there was no Gung ho master! All this while being run by pirates milking the system dry! On the opposite fence we have AirAsia run by responsible people, making more money daily and buying more new planes!? Same country, same Malaysian, same airport, 2 different airlines, run by 2 different group of people, one making money and the other forever running at a loss – you get the idea!?

  2. akarta – The distrust caused by the second Boeing 737 MAX 8 crash is spreading. More and more country to impose flight-ban for the aircraft due to safety concerns. After Australia today, British authority has also banned Boeing 737 MAX flights on its airspace.
    Apart from the civil aviation authorities of the countries, the airline operators also to raise questions about the safety of Boeing’s new generation single-aisle. Following the second MAX 8 crash, Indonesian airline Lion Air considers switching to Airbus, according to an insider.
    Lion Air had blamed Boeing after its Flight 610 crashed into the Java Sea just after take off.
    The Indonesian carrier has ten Boeing 737 MAX 8 in service and expects four more this year. However, the airline may not take over these jets, for the time being, said Lion Air CEO Daniel Putut.
    Lion Air is Indonesia’s largest airline and one of the largest customers of Boeing’s revamped single-aisle jet. The airline has ordered more than 200 copies. The company is also the first airline to operate the longer version MAX 9.
    According to an insider who is familiar with the matter, the operator is considering switching to the Airbus’s new generation single-aisles (both A320neo and A321neo) for the expansion of its fleet.
    The company did not want to comment on further fleet plans when asked by Bloomberg news agency. However, Lion Air co-founder Rusdi Kirana said in December that he was planning to withdraw the billion-dollar order.

  3. Being an aviation enthusiasts and having followed Malaysia Airlines even before it was created from the split of Malaysia-Singapore Airlines into Malaysia Airlines System (MAS) and Singapore Airlines (SIA), I agree with many in Malaysia who feel that if the new Malaysian government were to decide to close down Malaysia Airlines, it would be the “right” decision.

    Malaysia Airlines has been linked to the HIGHLY corrupted ex-goverment of Malaysia which was toppled last year after about 60 years. It was used by government ministers to fly to different parts of the world at taxpayers’ expense, usually in first or business class. Malaysia Airlines was also used by the government to fly routes, both international and domestic , which were loss-making, just for prestige. Profitability for the airline was secondary to that government. The airline was used the government like some kind of “national toy” and not really a serious business concern.

    Soon after the two unfortunately incidents when not one, but two Boeing 777’s were lost, and the airline was on “death bed”, the Malaysian public were clamoring for the airline to be closed as it would have been a waste of taxpayers’ money to prop it up. Instead, the then “corrupt” government insised on pumping in Billions of dollars though its sovereign fund, to re-organized the airline and called it Malaysia Airlines Berhad (MAB) in place of Malaysia Airlines/Malaysia Airlines System (MAS). It was also taken off the Malaysian stock market.

    For years, there has been other interferences from the Malaysian government. This included the past Prime Minister (who is being charged for being allegedly involved in major corruption cases that nearly brought the entirely country down) , who visited the US. Some suggested that he pressured Malaysia Airlines to sign an MoU for several Boeing Dreamliners, which the airline did not really want, but he did it just for political reasons (some suggested he wanted to get into the good books of Donald Trump). Malaysia Airlines then was more interested in the Airbus A350 and A330 to renew their long-range fleet, not the Dreamliner.

    After having had two expatriate CEO’s come and go, and now a Malaysian CEO at the helm, the original objective was for the airline to finally make its first annual profit in 2018 after many years in the red. 2018 came and the profit target time was put backwards to 2019. Now, it looks dubious if it will achieve goal of profitability in 2019. This is probably the reason why the new Malaysian government, which is more pragmated and which were voted into government in 2018, on promoting “transparency” in their manifesto, have decided perhaps , enough is enough.

    Many Malaysians have called for a completely new national airline, which is privately funded and managed , should take the place of Malaysia Airlines, something alone the lines of AirAsia, but still providing full-service instead of being a budget airline.

    It will be interesting to see what the new government decides. They may also feel that a new Malaysian flag-carrier represents the new government, as Malaysia Airlines was somewhat linked to the old corrupt and inefficient past of the country.

Leave a Reply

Your email address will not be published. Required fields are marked *

Recommended Stories: