Government to stop funding Malaysia Airlines

Government to stop funding Malaysia Airlines

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The Malaysian Tourism and Culture Minister Nazri Aziz said that Malaysia Airlines will not be receiving financial support from the government any longer. A report from Dubai on May 7, 2014 quoted the minister who said that the country’s transport ministry has been involved in coming up with an action plan for the troubled airline.

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The news came out with the poor outlook provided by the management of the carrier on May 6, 2014. The Gulf News in Dubai had quoted the minister on May 7, 2014 saying that the government does not want to invest any more money in the airline following the MH370 incident. Nazri said, “To inject new capital is certainly not an option”.

At the end of 2013, the company’s cash balance was 3.87 billion ringgit, while total assets were 21.86 billion ringgit. In addition to that, the MH370 flight incident has proved to be a very expensive search, however, the search has been mostly funded by insurers which consist of a consortium led by Lloyds and how this is going to translate into the accounts of the airline is so far not clear.

At this point, the biggest risk is how long the search is going to last and how costly it is going to be. After the missing flight incident, the airline had to cancel flights and ticket sales has been decreasing in China.

Photo Credits: Daily Mail