Sunday, March 29, 2015
FAIRFIELD-SUISUN, CALIFORNIA
99 CENTS

Malaysia plans overhaul of national airline

Malaysia Airline Overhaul

A Malaysia Airlines Boeing 737-800 plane sits on tarmac at Kuala Lumpur International Airport in Sepang, Malaysia, Friday, Aug. 8, 2014. Malaysia's state investment company said Friday it plans to make Malaysia Airlines fully government owned, removing it from the country's stock exchange before carrying out a far-reaching overhaul of the carrier that is reeling from double disasters. (AP Photo/Vincent Thian)

By
From page B6 | August 09, 2014 |

KUALA LUMPUR, Malaysia — Malaysia’s state investment company said Friday it plans to make Malaysia Airlines fully government owned, removing it from the country’s stock exchange before carrying out an overhaul of the carrier that is reeling from double disasters.

Khazanah Nasional, which owns 69 percent of Malaysia Airlines, said it has proposed to the carrier’s board that it buy out minority shareholders at 27 sen (8 cents) a share, which is 29 percent higher than the airline’s average share price over the previous three months. The takeover would cost 1.38 billion ringgit ($429 million).

Malaysia Airlines has been hit by two major disasters this year, which added to its longstanding financial woes.

In March, Flight 370 from Kuala Lumpur to Beijing disappeared with 239 people on board after flying far of course. The plane has still not been found, with a search in the southern Indian Ocean underway. In July, 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.

Khazanah said the state takeover will represent the first stage of a “complete overhaul” of the loss-making airline, and that detailed plans will be announced by the end of this month.

“The proposed restructuring will critically require all parties to work closely together,” it said in a statement. “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.”

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 two almost unfathomable tragedies. It has lost money for the past three years and been through several episodes of restructuring, instigated by Khazanah, over the past decade.

As a state-owned flag carrier, Malaysia Airlines is required to fly unprofitable domestic routes, and its strong union has resisted operational changes. Nimbler discount rivals such as Air Asia have expanded rapidly, while Malaysia Airlines has been like a supertanker, slow to change direction.

Shukor Yusof, founder of aviation research firm Endau Analytics, said another restructuring won’t yield positive results if fundamental problems aren’t addressed.

“I’m skeptical of the success of it because I’m not sure it will address the root problems of the airline,” he said.

Its biggest problems are $4 billion of debt accumulated since 2002, unprofitable routes and bloated staff numbers, Shukor said.

Some analysts say the airline wouldn’t survive a year without a substantial cash injection from the Malaysian government. Crisis management experts have said Malaysia Airlines must take dramatic steps, such as replacing its top executives and changing its name, to win back customers.

Khazanah’s offer to minority shareholders gives them more than what their shares were worth before each of the passenger jet disasters. Even so, the airline’s share price has been in a long-term decline due to its losses.

The day before Flight 370 vanished, the airline’s share price was 25 sen. It was 23 sen the day before Flight 17 was downed.

Khazanah said its plan requires approvals from regulators and Malaysia’s finance minister.

 

The Associated Press

The Associated Press

LEAVE A COMMENT

Discussion | No comments

The Daily Republic does not necessarily condone the comments here, nor does it review every post. Read our full policy

  • Recent Articles

  • Enter your email address to subscribe and receive notifications of new posts by email.

  • .

    Solano News

    Vanden High library project nears completion

    By Bill Hicks | From Page: A1 | Gallery

     
    Vanden girls end stellar season

    By Brian Arnold | From Page: C1, 1 Comment | Gallery

    Cheers for Jupiter – and roller derby

    By Brad Stanhope | From Page: A2, 2 Comments

     
    Red Cross volunteers help assemble first aid kits

    By Bill Hicks | From Page: A3 | Gallery

    PG&E helps replace stolen equipment

    By Bill Hicks | From Page: A3

     
    Justin-Siena names new principal

    By Bill Hicks | From Page: A3

     
    Vacaville police make arrest after pursuit

    By Bill Hicks | From Page: A3, 3 Comments | Gallery

    Vacaville bridal, quinceanera show a hit

    By Susan Hiland | From Page: A5

     
    Event benefits child who attends Cambridge School

    By Susan Hiland | From Page: A5 | Gallery

    Free paper shredding option returns to Fairfield

    By Susan Hiland | From Page: A5 | Gallery

     
    Best barometer of investment success: Wealth

    By Mark Sievers | From Page: B8

     
    Tips on hydrozoning your garden

    By Tina Saravia | From Page: B8, 2 Comments

     
    Fairfield police log: March 27, 2015

    By Susan Hiland | From Page: A12, 2 Comments

     
    Suisun City police log: March 27, 2015

    By Susan Hiland | From Page: A12

    .

    US / World

    Crash victim’s father calls for more focus on pilot welfare

    By The Associated Press | From Page: A1

     
    Experts: Sex bias case will embolden women despite verdict

    By The Associated Press | From Page: A1

     
    Popular Yosemite National Park lookout opens early in season

    By The Associated Press | From Page: A9

     
    Some British Airways frequent flier accounts miles breached

    By The Associated Press | From Page: A11

    7 shot and injured at Florida spring break house party

    By The Associated Press | From Page: A11

     
    Boko Haram kills 39, legislator, disrupting Nigeria election

    By The Associated Press | From Page: A11

    Official: Al-Shabab siege at Somali hotel ends, 24 dead

    By The Associated Press | From Page: A11

     
     
    Bird flu found in a top Minnesota turkey producing county

    By The Associated Press | From Page: A11

    Islamic fighters led by al-Qaida in Syria seize major city

    By The Associated Press | From Page: A13

     
    .

    Living

    Today in History: March 29, 2015

    By The Associated Press | From Page: A2

     
    Community Calendar: March 29, 2015

    By Susan Hiland | From Page: A2

    Pope finds popularity and dissent at 2-year mark

    By The Associated Press | From Page: C3

     
    Truth does not change

    By The Rev. Art Zacher | From Page: C3, 20 Comments

    Horoscopes: March 29, 2015

    By Holiday Mathis | From Page: B8

     
    Daughter choses stepdad over father to walk her down the aisle

    By Kathy Mitchell and Marcy Sugar | From Page: B8

    .

    Entertainment

    PUBLISHERS WEEKLY BEST-SELLERS

    By The Associated Press | From Page: A10

     
    Second Julie Andrews memoir expected in 2017

    By The Associated Press | From Page: A10

    Chrissie Hynde memoir coming in September

    By The Associated Press | From Page: A10

     
    TVGrid

    By Daily Republic Syndicated Content | From Page: B12

    .

    Sports

     
    Warriors beat Bucks 108-95, clinch top seed in West

    By The Associated Press | From Page: B1

    Wisconsin heads to Final Four after 85-78 win over Arizona

    By The Associated Press | From Page: B1

     
    Burns scores winner in SO to lift Sharks past Flyers, 3-2

    By The Associated Press | From Page: B1

     
    Jenest pitches SCC baseball team to shutout of Contra Costa

    By Daily Republic staff | From Page: B2

    AP sources: Texas fires coach Barnes after 17 years

    By The Associated Press | From Page: B2

     
    Kazmir, Quintana both strong; A’s beat White Sox 10-4

    By The Associated Press | From Page: B2

    Zunino homers twice, but Giants rally to edge Mariners 9-8

    By The Associated Press | From Page: B2

     
    Gordon, Earnhardt among the winners and fans of Martinsville

    By The Associated Press | From Page: B2

    Prince Bishop wins Dubai World Cup, California Chrome 2nd

    By The Associated Press | From Page: B2

     
    Serena Williams easily wins opening match at Miami Open

    By The Associated Press | From Page: B2

    Power leads Penske sweep in qualifying for IndyCar opener

    By The Associated Press | From Page: B2

     
    Revolution win first of season, beating Earthquakes 2-1

    By The Associated Press | From Page: B2

    Jimmy Walker leads hometown Texas Open

    By The Associated Press | From Page: B3

     
    .

    Business

    A glance at women in leadership roles in business worldwide

    By The Associated Press | From Page: B8

     
    For business, more women in charge means bigger profits

    By The Associated Press | From Page: B8 | Gallery

    US drillers scrambling to thwart OPEC threat

    By The Associated Press | From Page: B8 | Gallery

     
    Test trial to use computer servers to heat homes

    By The Associated Press | From Page: B14

    .

    Obituaries

    Betty Mason

    By Nancy Green | From Page: A4

     
    Tiffany Lyn (Helzer) Kemp

    By Nancy Green | From Page: A4

    Richard F. Coleman

    By Nancy Green | From Page: A4

     
    James Lee Lewis

    By Nancy Green | From Page: A4

    Helen Kalis

    By Nancy Green | From Page: A4

     
    Carol A. Vose

    By Nancy Green | From Page: A4

    .

    Comics