Malaysia Airlines and AirAsia, once contrasting, now face same crisis

Malaysia Airlines' previous attempt turn itself around collided with low-cost local rival AirAsia Group's rise. Now, both companies have run into the same turbulence. Malaysia Airlines, which has yet to recover from two 2014 tragedies that made global headlines, faces a growing risk of being forced to halt flights unless it secures aid. But the state has frowned on the idea of another bailout. A group of creditors recently rejected a proposal by MAS to restructure its 16b ringgit ($3.85b) in liabilities. This comes after the company made deep pay cuts for management and pilots, as well putting staff on unpaid furloughs to reduce costs as the coronavirus pandemic paralyzed global air travel. This disruption has also clouded the prospects for leaner AirAsia Group, which together with the flag carrier holds a majority market share in the country. "Our partners and creditors will have to sacrifice for the better of the future," Izham Ismail, group CEO of Malaysia Airlines, told The Edge Malaysia newspaper in mid-October. "If they don't want to help themselves to survive, I have no choice but shut it down." Malaysia Airlines revealed that it entered into debt restructuring negotiations with creditors in early October. The airline called on leasing companies and suppliers to cooperate with the turnaround effort. If the creditors had agreed, the restructuring would have been completed within the next few months, according to Malaysia Airlines' plan. The government has expressed its unwillingness to embark on another public-sector bailout of the national carrier, which is fully owned by the sovereign wealth fund Khazanah Nasional. A proposal has been floated to liquidate the airline and transfer a portion of the assets and staff to Firefly, the group's low-cost carrier. Story has more details.<br/>