Malaysia Airlines talks to creditors in urgent restructuring

Malaysia Airlines planes are seen at Kuala Lumpur International Airport. The airline has reached out to lessors, creditors and key suppliers as part of its “urgent” restructuring exercise.

Kuala Lumpur: Malaysia Airlines Bhd. has reached out to lessors, creditors and key suppliers as part of its “urgent” restructuring exercise as it sees little sign of the pandemic easing.

The flag carrier, wholly owned by Malaysia’s sovereign wealth fund Khazanah Nasional Bhd., would take more drastic measures if the restructuring can’t be completed over the next few months, according to a statement issued on Friday. Bloomberg reported earlier that the airline was said to be talking to banks and leasing companies to defer payments.

“The deep impact of the prolonged Covid-19 crisis has necessitated Malaysia Aviation Group to take drastic steps in revising its long-term business plan further to ensure the group’s relevance and survival,” according to the statement, which refers to the holding company.

The carrier has embarked on salary cuts for its management and pilots, offered no-pay leave, sought payment deferrals and contract renegotiations since March. It will now review its network and fleet plans.