Reeling from years of losses and most recently the bad press of Flight MH370’s tragic disappearance over the Indian Ocean, Malaysia Airlines is considering the possibility of selling off its MAS Engineering division, to bring the airline back into the black.
Spinning off the national carrier’s non-core businesses will allow the airline to pump the proceeds of the sales back into its core passenger chartering business.
Bilqis Bahari and Zafira Anwar of the Business Times report that an aviation industry source says selling MAS Engineering would be much better for the airline than declaring bankruptcy or calling for a privatisation exercise.
“Singapore Airlines did the same by selling non-core units as part of its restructuring plan.
MAS can sell its engineering division to raise money to finance its airline operations instead,” the source told Business Times.
The spin-off would allow Malaysia Airlines to focus on its core operations while cutting costs on maintenance, repair and overhaul.
“That would eventually help reduce its overall operation cost. The sale will also bring strategic investors into the company and allow MAS to tap third-party investors, too,” the source said, adding that MAS could still hold some shares in MAS Engineering.
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Bloomberg says MH370 might break Malaysia Airlines for good
