The Malaysian government is taking over Malaysian Airlines to prevent the flag carrier from going under. After suffering the loss of two Boeing 777s and more than 600 passengers and crew in six months in the most bizarre circumstances imaginable, the airline was most likely headed for bankruptcy, but Malaysian Prime Minister Najib Razak said in a statement Friday the country couldn’t allow that to happen. “MAS is part of Malaysia’s history. It is a symbol of national pride, of our ambitions and our place in the world,” he said. “It is more than just a company to us. So today we are making changes to ensure it is also part of Malaysia’s future story.” Investigators, ducking gun battles between Ukraine forces and Russian-backed rebels, are still probing the wreckage of Flight MH17, which was downed by a Russian-made radar-guided missile near the battleground that Donetsk has become and there’s still no trace of MH370, which disappeared likely over the southern Indian Ocean in early March. While the incredible tragedies would be enough to put any airline in trouble, Malaysian was having some difficulties before the disasters and Razak said the takeover will address those issues.
The Government of Malaysia, through its strategic investment fund Khazanah Nasional Berhad (Khazanah), announced a formal process to take full ownership and de-list Malaysian Airline System Berhad (MAS). “This is the first step needed to return our national carrier to profitability,” Razak said. Once the new management is in place, it will conduct a full overhaul of the airline with an eye to long-term sustainability. That likely means layoffs and other unpleasantness but Razak said it will be done fairly with due process.”It is therefore critical that all parties close ranks and work closely together. Without the full support of all parties – management, employees, unions, creditors and vendors – as well as loyal passengers and the Malaysian people – this restructuring will not succeed,” he said.
