The national carrier of Malaysia, Malaysia Airlines, is up for a decision by its government on whether it should be shut down, sold off, or refinanced.

This was the announcement made by Malaysian Prime Minister Mahathir Mohamad on March 12, Reuters reported.

Said Mahathir:

"It is a very serious matter to shut down the 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. All these things are open for the government to decide."

Mahathir's announcement had come in the wake of a statement by aviation analysts that said the airline had become unsustainable after failing to meet its three-year target for profitability, the Malay Mail reported.

Turnaround plans have failed

According to both Malay Mail and New Straits Times (NST), Malaysia Airlines had been privatised in 2014 by Khazanah Nasional, Malaysia's sovereign wealth fund, in an attempt to revive the airline after suffering heavy losses.

However, Mohshin Aziz, an aviation analyst from Maybank Investment Bank Bhd, told NST that the airlines' turnaround plans had failed.

Additionally, RM6 billion had been injected by Khazanah Nasional into the airline to keep it afloat.

However, this did not stop the trend of losses from continuing.

That same year, the airlines had suffered a serious blow to its image after the disappearance of MH370 in March 2014 and the shooting down of MH17 in July 2014, over Ukraine.

Subsequently, from 2015 to 2017, the airline registered a loss of RM2.3 billion due to the ringgit’s weakness and higher jet fuel costs, NST reported.

Mohsin was quoted by NST as stating:

"Should Malaysia have a national airline? That argument is becoming weaker because we have been bailing it out many times."

No longer a source of national pride

Mohsin further noted that emotional attachment and sense of pride associated with the airline was no longer as prevalent.

"Nowadays, the attachment and sentiment to the national airline is not as strong as before. Previously, there was a sense of pride attached to the brand. But today, the emotional attachment is not as strong, particularly among the younger generation."

He added that should the airline be sold, it would either be sold to an interested party, entered into a joint venture with other airlines, or see its parent company, Malaysia Aviation Group, sell off one of its subsidiaries, such as MAB Engineering.

If the shutdown route is chosen instead, the airlines' assets, such as aircraft and properties, would be used to repay debts, while some of its employees would be redirected to other regional airlines such as Malindo Airways or AirAsia, NST highlighted.

Another aviation analyst, Shukor Yusof, the founder of Malaysian-based aviation consultancy firm Endau Analytics, was also quoted by NST as stating that there was a need for accountability as well:

"What’s more important, in my view, is to take to task the people who have been responsible for ruining MAS. There must be accountability."

Top image from Malaysia Airlines' Facebook