Malaysia’s state investment company plans to make the country’s flag carrier fully government owned, removing it from the stock exchange before carrying out a shake-up of the airline, which is reeling from double disasters.
Khazanah Nasional, which owns 69 per cent of Malaysia Airlines, has proposed to the carrier’s board that it buy out minority shareholders at a total cost of about £255 million, representing the first stage of a “complete overhaul” of the loss-making airline.
It said: “Nothing less will be required in order to revive our national airline to be profitable as a commercial entity and to serve its function as a critical national development entity.”
Malaysia Airlines has been hit by two major disasters this year, which added to its long-standing financial woes.
In March, Flight 370 from Kuala Lumpur to Beijing disappeared with 239 people on board after flying far off course. The plane has still not been found, with a search in the southern Indian Ocean underway.
Last month, 298 people were killed when Flight 17 was shot down over Ukraine. It was heading to Kuala Lumpur from Amsterdam and was shot out of the sky over an area of eastern Ukraine controlled by pro-Russian separatists.
Before the disasters, the carrier’s financial performance was among the worst in the industry, putting a question mark over its future even before its brand was tied to the two tragedies.
The airline said: “We have received notice of Khazanah’s intentions to take full ownership and delist Malaysia Airlines.
Our board of directors will be deliberating this proposal and an official response from the company will be issued later. During this period, our business operations remains unchanged.”