Malawi Airlines faces liquidation as cash flows dwindle

Malawi Airlines could be liquidated should its two shareholders, the Malawian government (51%) and Ethiopian Airlines (49%), fail to inject much-needed fresh capital. The Nation newspaper cited company documents last week as saying that the airline's board of directors had declared it to be technically insolvent during a meeting on March 25. According to the report, by February the carrier had cumulative losses of MWK14.09b (US$17.86m) against total debts of MWK13.83b (US$17.54m). “The directors have assessed the company and found it technically insolvent and not a going concern if shareholders do not inject equity into the company. The directors are of the opinion that the company cannot continue to trade in its current state without a rescue package, while there is still a significant gap between costs and revenue,” the resolutions said. The board said that Malawi Airlines' losses had started even before the pandemic, given intense regional competition from other southern African carriers as well as high operating costs. As such, while COVID has worsened the situation, shareholder failure to assist the airline would be the final blow.<br/>