Monday 22 Jul 2024
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KUALA LUMPUR (Oct 12): Cash-strapped low-cost carrier MYAirline Sdn Bhd announced on Thursday that it is suspending its flight operations effective immediately until further notice, potentially making it the first Malaysia-based airline to collapse post-pandemic, even as the industry regains its footing after years of Covid-19. 

This comes as the airline on Sunday said it was in advanced stages of finalising strategic partnerships. It had also received an extension for its air operator's certificate from the Civil Aviation Authority of Malaysia on Monday, allowing it to operate commercial passenger flights for another two years until 2025.

In a statement issued early Thursday morning, the airline said it had come to this "extremely painful decision, because of significant financial pressures that have made it necessary to suspend operations pending the shareholder restructuring and recapitalisation of the airline".

"We deeply regret and apologise for having to make this decision, as we understand the impact it will have on our loyal passengers, dedicated employees and partners.

"We have worked tirelessly to explore various partnership and capital raising options to prevent this suspension. Unfortunately, the constraints of time have left us with no alternative, but to take this decision," the board of directors said.

The board comprises MYAirline co-founder and major shareholder Datuk Allan Goh Hwan Hua, his son Sean Goh Tze Han, former Civil Aviation Department of Malaysia director general Datuk Seri Azharuddin Abdul Rahman, former Malaysia Airports Holdings Bhd (MAHB) chief operating officer Datuk Abd Hamid Mohd Ali, MYAirline co-founder and former chief executive officer Rayner Teo Kheng Hock, and Trillion Cove Holdings Bhd director Jothi Prakash Murugan.

Teo, who has been at the helm of the airline since its inception, stepped down on Sunday, citing health considerations.

Affected MYAirline passengers have been told to reach out to the airline at [email protected] (from 7am to 12 midnight) to initiate their refund process.

"In the meantime, we are advising affected passengers to not head to the airport, and seek alternative travel arrangements to their destinations," said MYAirline.

"The board, shareholders and all of us at MYAirline will be working tirelessly to resume operations as quickly as possible, but at this stage, we are unable to commit to any timeline.

"We reiterate our sincerest apologies for any difficulty and inconvenience arising from this suspension, and will do our utmost to provide any updates which become available," the airline added.

In an internal memo to staff on Thursday (Oct 12), MYAirline chief human resources officer Yeoh Sai Yew said the board has "spared no effort in exploring all avenues for potential partnerships and capital raising exercises to rescue the airline" before it made the decision to temporarily suspend its flight operations.

"Sadly, time constraints have left us with no alternative but to take this decision," he noted.

He added that starting Oct 12 and until further updates, all MYAirline staff will be working from home. Staff are also encouraged to utilise any unused annual leave they may have. 

In recent weeks, the rumour mill has gone into overdrive that MYAirline was in serious financial trouble over allegations of unpaid staff wages, late payment of services providers' dues, and difficulty in raising funds for new aircraft leases.

According to various news reports, MYAirline had also approached Sarawak Premier Tan Sri Abang Johari Tun Openg's son Abang Abdillah Izzarim Abang Abdul Rahman Zohari to become an investor.

On Wednesday, Transport Minister Anthony Loke Siew Fook urged MYAirline to approach economic regulator Malaysian Aviation Commission (Mavcom), and present any issues they face to the commission first, before assistance can be provided in terms of facilitation, licensing, and regulatory support.

Commencing operations in December 2022, MYAirline operated a fleet of nine Airbus A320-200s out of Terminal 2 of the Kuala Lumpur International Airport. The airline aimed to have a total of 20 aircraft by year end.

In a report on Tuesday, CGS-CIMB Research said because MYAirline is primarily domestic in nature, and had only 9% market share of domestic Malaysia seat capacity at its peak in August 2023, the impact on MAHB from a potential collapse of the airline will not be overly damaging. "MYAirline has so far been primarily a domestic airline, and competitors may grow into what it may leave behind at MAHB’s airports," the research firm added.

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