KUALA LUMPUR: MYAirline Sdn Bhd is still hopeful of securing new investors to restore its service soon to ensure the welfare of over 900 employees are protected and the reimbursement for 117,000 affected passengers can be carried out.
"We really hope to save MYAirline as we have salaries to pay for employees, passengers to refund and more importantly MYAirline is a good product and we know we were making a difference in the market," MYAirline interim accountable executive Datuk Seri Azharuddin Abdul Rahman told Bernama.
He said that out of the 15 potential investors reported, two are in an advanced stage of negotiations.
Without going into detail, Azharuddin said these investors are aerospace companies based abroard and have other business operations in Malaysia.
He also cleared the air that none of the potential investors at large and the two in the final stages of negotiations are linked to any of the local players.
Once that hurdle is cleared, he said the focus will be on restoring services as well as cash refunds for the affected passengers.
"The process of restoring operations will take a few months as the safety checks on aircraft need to be done and we need to sort out the licences too," he explained.
Failure too fast too soon Azharuddin acknowledged that a combination of high overhead costs, falling capital and an aggressive expansion plan were among the reasons for the carrier's current predicament.
The final nail was when the deal to conclude an agreement with a potential investor fell through at the eleventh hour, on October 11.
"We knew the landing was about to happen, but we did not expect it to be a hard one," he said, adding that load factor was never an issue.
Since its inaugural flight on December 1, last year, the airline reached an average of 91 per cent load factor and has flown eight Airbus A320-200 till October 12, delivering a healthy on-time-performance of beyond 90 per cent.
It started with two aircraft, and within its 11 months of operation, it had nine aircraft in its fleet.
At the point of its suspension, the 10th and 11th aircrafts arrived and the airline had enough pilots and co-pilots to operate all 11 in its fleet.
He also appreciated the members of the media to report the true picture especially in the circumstances where the livelihood of employees and the reputation of the airline is at stake.
Over the past years, it had been obvious that it was no normal circumstances for the aviation sector when it comes to fuel prices given the constant changes in geopolitical scenario that had fuel price spiralling upwards.
During the period of its operations, crude oil increased from US$80 (RM374) to over US$100 (RM467) per barrel in May this year coupled with the strengthening of the US dollar, he said, adding that as a small player, it can't hedge fuel prices as yet.
"My team and I are working very hard to ensure that we are able to secure an investor for MYAirline.
"Despite the circumstances, we have received multiple encouraging messages from passengers and stakeholders for us to make a comeback – that inspire all of us," he said.
Can anyone start an airline business?
Azharuddin, who is a former Civil Aviation Authority of Malaysia chairman, said the law dictates that an airline could commence operations with a minimum of two aircraft.
According to Civil Aviation Directives 6004 – Issuance and Renewal Requirements for Air Operator Certificate (AOC), a fleet shall consist of a minimum of two aeroplanes or helicopters for scheduled operation and the specification may, however, be reduced to one aircraft or helicopter for non-schedule operation.
In order to obtain an AOC, Azharuddin said that among other things, a fleet should consist of Malaysian registered aircraft, the type of aircraft, sufficient qualified personnel, flying destination and capital size with proper documentation.
Competition is healthy but…
The Centre for Asia Pacific
Competition is healthy but…
The Centre for Asia Pacific Aviation chief analyst, Adrian Schofield, said excessive competition could weaken the bottom line of an airline and threaten its viability, which is not good for passengers, the aviation industry or the national economy.
"Malaysia has a good number of airlines, with an extensive international network offered. Also, there are good options for passengers with both full-service carriers and low-cost carriers and of course, many options through overseas-based airlines.
"So, it is hard to see the real need for additional airlines in Malaysia," he said, adding that Malaysian carriers are confronted with high fuel prices, inflation and unfavourable foreign currency exchange rates.
Schofield noted that higher demand and revenue were helping to offset these challenges and many carriers have been able to reduce their costs through restructuring processes during the pandemic period. — Bernama