Dubai: The Malaysian government will not support its troubled national carrier, Malaysia Airlines, with a capital injection, a senior government minister has said two months after flight MH370 went missing.
Speaking in Dubai on Tuesday, Mohammad Nazri Abdul Aziz, Minister of Tourism and Culture, said the government does not want to put “any more money” into the ailing carrier.
The state-owned national carrier is restructuring following $1.3 billion in losses over the last three years amid unprofitable routes and stiff regional competition. The airline is under increasing financial pressures with bookings declining following the disappearance of flight MH370.
Aziz, who is also a member of cabinet, admitted that the government is at a loss on what it can do with the airline, however, affirmed that injecting fresh capital is not an option.
“To inject new capital is certainly not an option,” he said.
Malaysia Airlines is owned by the government through a holding company, however, at present it is unlikely the government will move to offload its national carrier to private investors. The share price has dropped under the restructuring plan and further plummeted following the disappearance of flight MH370.
Aziz said the Minister of Transport will be tasked with determining the government’s plan for the national carrier.
Senior management at the airline could also be on the chopping block.
Aziz was unwilling to comment as to whether the airlines senior management still has the support of the government. Its chief executive, Ahmad Jauhar Yahya, was hired in 2011 and has been directed to turn the airline around. However, it is unclear if the government could move to oust in following the backlash on flight MH370.
The missing flight has drastically impacted Malaysia’s tourism industry and also soured relations with China, a major source market but also where a majority of MH370 passengers were from.
Aziz said there has been a 30 per cent in drop off in tourism numbers from China and since MH370 went missing there have been “many cancellations” and “no new bookings for the rest of the year” on Malaysia Airlines services.
The minister was in Dubai at the Arabian Travel Market to plug the tourism industry in Malaysia.