Thursday, 24 July 2014 - 13:45
Malaysia Airlines bankruptcy considered
Malaysia Airlines may become bankrupt after their second crash scandal within just four months rocks the airline to its foundations. The companies only remaining options seem to be delisting, according to sources from Bloomberg. The airline company is hatching a revival plan, which it plants to present to its state-run parent Khazanah Nasional Bhd. this week. According to sources, it's either go private or go bankrupt. Both of these plans would involve the name Malaysia Airlines being erased from flight schedules around the world. Being the name tied to the death of 537 people, and the loss of two planes since March is putting a strain on Malaysia Airlines for time, which Moshin Aziz from Malayan Banking Bhd. says is a luxury they don't have. "Malaysia Air doesn't have a huge balance sheet, it's still struggling from perception issues. We will probably see drastic measures", Aziz tells Bloomberg. Terence Fan says going private will be "killing a few birds with one stone" for Khazanah. "They can make the cash flow, maybe have some thorough strategic change and use this as a chance to rebrand themselves." According to Bloomberg, going bankrupt could out Malaysia Airlines at the highest loss of assets since AMR Corp. went bankrupt in 2011. Malaysia Airlines employees generated an average of $220,000 in revenue in the last three years, Bloomberg has calculated. Compared with $524,800 at Singapore Airlines and $245,000 at Thai Airways. "Even the strongest airlines would be falling on their knees on these two incidents", Moshin at Malayan Banking tells Bloomberg. A decision on this matter is expected as early as next month, sources say.