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October 14, 2020, 10.16 PM

KUALA LUMPUR, – Malaysia’s low-cost carrier Firefly could become the country’s national airline if Malaysia Airlines shuts down, according to the head of Khazanah Nasional.

Shahril Ridza Ridzuan as head of the sovereign wealth fund made the fund’s first public statements to the newspaper Berita Harian.

Malaysia Airlines’ parent company has warned that the flagship airline could face big trouble if lessors did not agree to steep discounts.

Read also: Garuda Indonesia's Debt Balloons to $2.2B on Coronavirus Pandemic Woes

Firefly, which operates a fleet of 12 twin turboprops, mainly within the country, is currently a fully owned subsidiary of Malaysia Aviation Group (MAG).

According to a MAG letter sent to lessors and seen by Reuters, Firefly would obtain narrow-body planes and subsequently wide-body aircraft from the market in a "Plan B" scenario.

Khazanah Nasional, the sole shareholder in MAG, will discuss the next steps when the outcome of restructuring talks becomes clearer, the newspaper reported.

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"If Khazanah continues to finance Malaysia Airlines which does not have a strong financial position and often suffers losses, Khazanah will have to dispose of its holdings in other strategic assets or increase debt," Shahril was also quoted as saying.

Finance Minister Tengku Abdul Aziz said last week the government will not provide financial support to Malaysia Airlines and that any aid was for Khazanah Nasional to address.

(Writer: Liz Lee | Editor: Edwina Gibbs)


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