Malaysia Airlines could be sold or shut down, says PM

The 71-year-old airline has been on the ropes since 2014 when Flight MH370 disappeared and MH17 was shot down by a Russian-made missile over war-torn Ukraine. (Shutterstock)
Updated 12 March 2019

Malaysia Airlines could be sold or shut down, says PM

  • Mahathir Mohamad: We will be studying and investigating as to whether we should shut it down or we should sell it off or we should refinance it
  • Mahathir, 93 and in his second stint as premier, is seeking to reduce a mammoth national debt inherited from the previous, corruption-plagued regime

KUALA LUMPUR: Malaysia Airlines may be sold or shut down, Malaysia’s leader said Tuesday, the latest bad news for a carrier that has been in crisis since suffering the loss of two planes.
The 71-year-old airline has been on the ropes since 2014 when Flight MH370 disappeared and MH17 was shot down by a Russian-made missile over war-torn Ukraine.
With the carrier teetering on the brink of bankruptcy, sovereign wealth fund Khazanah stepped in to take it over several years ago and major reforms were instituted, including cutting thousands of staff.
But it has continued to fare poorly and its performance was blamed in large part for a set of poor financial results released by Khazanah last week.
Responding to questions about the airline’s future, Prime Minister Mahathir Mohamad told reporters in parliament: “I think it is a very serious matter, to shut down the national airline.
“We will nevertheless be studying and investigating as to whether we should shut it down or we should sell it off or we should refinance it.”
Official news agency Bernama reported that Khazanah last week posted a pre-tax loss of 6.3 billion ringgit ($1.54 billion) for 2018, compared with a pre-tax profit of 2.9 billion ringgit the year before.
Mahathir, 93 and in his second stint as premier, is seeking to reduce a mammoth national debt inherited from the previous, corruption-plagued regime.
Malaysia Airlines said in a statement it had been “working closely” with Khazanah on the next phase of its turnaround plan since September.
The disappearance of Flight MH370, which was carrying 239 people, remains one of the world’s greatest aviation mysteries, and successive searches have failed to find the plane.


Oil falls below $57 on virus impact and OPEC+ delay

Updated 19 February 2020

Oil falls below $57 on virus impact and OPEC+ delay

  • Contagion ‘is spooking market players,’ analysts say after Asian shares fall and Apple issues warning

LONDON: Oil fell below $57 a barrel on Tuesday, pressured by concerns over the impact on crude demand from the coronavirus outbreak in China and a lack of further action by OPEC and its allies to support the market.

Forecasters including the International Energy Agency (IEA) have cut 2020 oil demand estimates because of the virus. Though new cases in mainland China have dipped, global experts say it is too early to judge if the outbreak is being contained.

Brent crude was down 82 cents at $56.85 a barrel in mid-afternoon trade after rallying in the previous five sessions. US West Texas Intermediate crude fell 70 cents to $51.35.

“Risk aversion has returned to the markets,” said Commerzbank analyst Carsten Fritsch.

“OPEC+ has shown no sign yet of reacting to the virus-related slump in demand by making additional production cuts.”

The virus is having a wider impact on companies and financial markets. Asian shares fell and Wall Street was poised to retreat on Tuesday after Apple said it would miss quarterly revenue guidance owing to weakened demand in China.

“This has spooked market players and triggered a sharp pullback in risk assets,” said Tamas Varga of oil broker PVM.

The IEA last week said that first-quarter oil demand is likely to fall by 435,000 barrels per day (bpd) from the same period last year in the first quarterly decline since the financial crisis in 2009.

The Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, have been considering further production cuts to tighten supply and support prices.

The group, known as OPEC+, has a pact to cut oil output by 1.7 million bpd until the end of March.

The next OPEC+ meeting next month is set to consider an advisory panel’s recommendation to cut supply by a further 600,000 bpd. Talks on holding an earlier meeting in February appear to have made no progress, OPEC sources said.

As well as OPEC+ voluntary curbs, support for prices has come from involuntary losses in Libya, where output has collapsed since Jan. 18 because of a blockade of ports and oilfields.