KUALA LUMPUR: It would be a “wrong move” to shut down Malaysia Airlines (MAS), said its chief executive officer Izham Ismail, as he pointed out that the move would affect many companies and stakeholders providing services to the loss-making national carrier.
In an interview with Malay Mail published on Sunday (Jun 2), he said: “Malaysia Airlines might not be profitable, but organisations, stakeholders, companies that give services to Malaysia Airlines are profitable.”
“That itself is a GDP (Gross Domestic Product) positive,” he said.
“Shutting down Malaysia Airlines would be a wrong move. This is my personal opinion, not the views of the organisation, the shareholders or its board of directors.”
Mr Izham said that although MAS only employs 13,500 people, more than 400,000 people in the aviation industry would be affected if the airline is to be shut down.
The fate of MAS has been up in the air. In March, Prime Minister Mahathir Mohamad said the government was considering whether to shut, sell or refinance the carrier.
Prior to the twin air disasters of MH17 and MH370, the airline had already been making years of sustained losses. The air accidents further compounded the situation.
In 2014, MAS unveiled a five-year recovery plan to turnaround the carrier.
In the turnaround plan, MAS had targeted to return to profit in 2018. However, the carrier has said that it missed this target, with 2019 being equally challenging.
The failure to meet its target was attributed to stiff competition, rising fuel prices, adverse foreign exchange rates (Malaysian ringgit against the US dollar) and crew shortage.
Malaysia Airlines was also unable to make money on many of its routes and has since trimmed its network.
READ: Malaysia Airlines seeks commercial tie-up with Japan Airlines on routes between both countries
Earlier, MAS said stiff competition in the near future is expected to continue. The airline also said it is working towards narrowing its losses in 2019 through a series of revenue improvements and cost rationalisation initiatives.
Going forward, Mr Izham said on Sunday that MAS will focus on its long-term business plan. He revealed that this may involve strengthening its premium services.
“We need to renew and restructure our ASEAN (Association of South-east Asian Nations) business proposition,” he said, according to Malay Mail.
Mr Izham also urged investors to come onboard and help turn MAS’ fortunes around.
Separately, MAS said on Monday that it is looking at its order for 25 Boeing Co 737 MAX jets "very carefully" in light of the global grounding, and plans for the first delivery in July 2020 could be delayed.