KUALA LUMPUR: Khazanah Nasional Bhd has yet to make any decision on the fate of Malaysia Aviation Group Bhd (MAGB), the parent company of national carrier Malaysia Airlines Bhd (MAB).
Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz said the decision to close down and cease the operation of MAGB hinges on negotiations between the company and creditors as well as lessors over its restructuring plan.
"At the same time, the management of Khazanah Nasional will ensure that the welfare of MAGB staff will be taken care of, including if there is a need to provide them with the necessary compensation in accordance with the country's labour laws," he said in his winding-up speech at the Dewan Rakyat today.
Under the five-year long Malaysia Airlines Restructuring Plan that was rolled out in 2015, Zafrul explained that MAB started to register progress until early this year before the global Covid-19 pandemic unleashed the economic and health crisis that also battered the aviation industry.
"In 2019, MAB managed to achieve revenue of 18 per cent of what was budgeted (projected for the national carrier)," he said.
As for MAGB, he said the company has been incurring losses from 2015 until 2018.
"MAGB incurred RM1.1 billion in losses in 2015, RM700 million losses in 2016, RM1.2 billion losses in 2017 and RM1.3 billion losses the following year.
"As of Aug 31, MAGB's liquidity was RM366 million, in addition to the RM578 million allocated to it by Khazanah Nasional," he said.
The national carrier, he said, was not spared from the severe economic impact brought about by the global pandemic.
"About 75 per cent of its aircraft are grounded due to travel restrictions which affected its load capacity and revenue," he said.
MAB was set up in 2014, aimed at restructuring and restoring the operation of Malaysia Airlines System (MAS). Subsequently, MAB was placed under MAGB, which is wholly owned by Khazanah Nasional.
"Since the government has no shares in MAB and MAGB, all decisions on the restoration and restructuring of the national carrier are fully subjected to the consideration and requirement of Khazanah Nasional's board of directors," he said.
Khazanah Nasional, he said, has injected RM28 billion into the national carrier to date.