By Polly Mosendz
After two major disasters in a matter of months, Malaysia Airlines is in for a “complete overhaul,” starting with privatization of the company. On Friday, the stock of Malaysia Airline System was delisted, the first step to going private.
Between the MH370 disaster in March and the more recent shooting of MH17 in Ukraine, the airline has struggled to recover. Passengers are leery to book a Malaysia Airlines flight, and many who previously did received full refunds after the MH17 crash. These two tragedies took the situation at Malaysia Airlines System (MAS) from bad to worse, as the airline had not turned a profit for three years.
Now, Malaysia’s state investment firm Khazanah Nasional is planning to buy out MAS for $436 million. They are already the primary investor, with almost 70 percent of the stake. In the event of this buyout, Khazanah would start removing less profitable flights, reducing payroll, and changing out management.
“Nothing less will be required in order to revive our national airline to be profitable as a commercial entity, and to service its function as a critical national development entity,” Khazanah said in a statement.
After the MH17 shooting, many speculated that this would be the end of the airline, assuming their only route was either a massive restructuring or bankruptcy. If the buyout is successful, Khazanah will have to offer extremely low rates to get a mass of passengers back on board their “haunted” planes.
This article was originally published at http://www.thewire.com/business/2014/08/struggling-to-recover-from-mh370-and-mh17-malaysia-airlines-goes-private/375782/
