Malaysia Airlines risks bankruptcy amid travel ban over Covid-19, says CFO
Monday, 16 Mar 2020 01:31 PM MYT
BY KENNETH TEE
Last week, the Malaysia Airlines Bhd urged employees to take voluntary unpaid leave following the disruption the Covid-19 has wrought on the aviation and tourism sectors. — AFP pic
KUALA LUMPUR, March 16 — Malaysia Airlines Bhd said travel bans and plummeting demand around the world due to the Covid-19 pandemic have put the loss-making national carrier at risk of bankruptcy.
According to financial daily The Edge, Malaysia Aviation Group (MAG) group chief financial officer Boo Hui Yee reportedly told Malaysian Airlines' 13,000 staff that the national carrier was no different than many airlines globally now at risk.
“The situation has deteriorated rapidly over the weekend forcing stricter travel restrictions by governments around the world, hence posing greater challenges in our operations.
“Demand has plummeted and passengers are jamming our global contact centre and social media accounts to cancel bookings, putting us in a critical situation. Many airlines are now at the risk of going bankrupt and Malaysia Airlines is no different,” she was quoted saying.
Last week, the airline urged employees to take voluntary unpaid leave following the disruption the Covid-19 has wrought on the aviation and tourism sectors.
MAS group chief executive Captain Izham Ismail also announced a 10 per cent pay cut for its senior management as part of measures to lower operational costs and cope with the weaker demand for air travel due to the Covid-19 outbreak.
Boo also said Malaysia Airlines was considering more hard decisions to sustain itself through this critical time in the future to stem losses and save cash.
“On the local front, we are facing political uncertainty which has caused volatility in foreign exchange. Coupled with oil price slump, the ringgit has weakened against the US dollar. This has resulted in a higher cost for us, which further exacerbated the critical financial situation which we are in due to slump in travel demand and sales.
“Our immediate priority is to stem losses, save cash and sustain the business against the highly ‘changeable’ uncertainty of the Covid-19 pandemic.
“Drastic actions have been taken to ensure sustainability of cashflow for the business and this includes capacity management, deterring non-critical spend, seeking vendors’ concessions, freezing of discretionary spend and cost cutting in many areas,” she said.
The World Health Organisation has declared the Covid-19 outbreak, which has swept through at least 150 countries, a global pandemic.
It’s the first time the WHO has called an outbreak a pandemic since the H1N1 “swine flu” in 2009.
Monday, 16 Mar 2020 01:31 PM MYT
BY KENNETH TEE
KUALA LUMPUR, March 16 — Malaysia Airlines Bhd said travel bans and plummeting demand around the world due to the Covid-19 pandemic have put the loss-making national carrier at risk of bankruptcy.
According to financial daily The Edge, Malaysia Aviation Group (MAG) group chief financial officer Boo Hui Yee reportedly told Malaysian Airlines' 13,000 staff that the national carrier was no different than many airlines globally now at risk.
“The situation has deteriorated rapidly over the weekend forcing stricter travel restrictions by governments around the world, hence posing greater challenges in our operations.
“Demand has plummeted and passengers are jamming our global contact centre and social media accounts to cancel bookings, putting us in a critical situation. Many airlines are now at the risk of going bankrupt and Malaysia Airlines is no different,” she was quoted saying.
Last week, the airline urged employees to take voluntary unpaid leave following the disruption the Covid-19 has wrought on the aviation and tourism sectors.
MAS group chief executive Captain Izham Ismail also announced a 10 per cent pay cut for its senior management as part of measures to lower operational costs and cope with the weaker demand for air travel due to the Covid-19 outbreak.
Boo also said Malaysia Airlines was considering more hard decisions to sustain itself through this critical time in the future to stem losses and save cash.
“On the local front, we are facing political uncertainty which has caused volatility in foreign exchange. Coupled with oil price slump, the ringgit has weakened against the US dollar. This has resulted in a higher cost for us, which further exacerbated the critical financial situation which we are in due to slump in travel demand and sales.
“Our immediate priority is to stem losses, save cash and sustain the business against the highly ‘changeable’ uncertainty of the Covid-19 pandemic.
“Drastic actions have been taken to ensure sustainability of cashflow for the business and this includes capacity management, deterring non-critical spend, seeking vendors’ concessions, freezing of discretionary spend and cost cutting in many areas,” she said.
The World Health Organisation has declared the Covid-19 outbreak, which has swept through at least 150 countries, a global pandemic.
It’s the first time the WHO has called an outbreak a pandemic since the H1N1 “swine flu” in 2009.
