| KUALA LUMPUR, July 22
KUALA LUMPUR, July 22 A plan to restructure
Malaysian Airlines could be announced as early as the
end of August, two sources with knowledge of the matter said,
after one of its planes crashed in Ukraine in the second
disaster to hit the carrier this year.
State investor Khazanah Nasional Bhd said in June
it would unveil plans within 6-12 months to restructure
Malaysian Airline System Bhd, as a slump in business since the
disappearance of Flight MH370 in March left the carrier set to
exhaust its cash reserves by mid-2015.
Already squeezed into three years of losses by intense local
and longer-haul competition, the airline turned in its worst
quarterly performance in two years in January-March.
The carrier, 69 percent owned by Khazanah, lost its second
flight in five months after flight MH17 was shot down over
Ukraine this month, killing all 298 people on board.
The sources, who declined to be named because the matter is
confidential, said the restructuring plan was expected to be
unveiled after the airline releases its second-quarter results
in the middle of next month.
The same sources told Reuters this month that Khazanah,
which has injected more than 5 billion ringgit ($1.58 billion)
into Malaysian Airlines over the last 10 years, plans to take
the carrier private as the first step.
A spokesman for Khazanah said: "We do not comment on
speculative reports." Malaysian Airlines declined to comment.
The airline is set to post another weak performance in the
April-June quarter as it continues to struggle with flight
cancellations, weak passenger yields and high overheads,
according to analysts.
Mohshin Aziz, an equity analyst from Malaysian broker
Maybank IB Research, has said he expects the carrier's
second-quarter results to be its weakest quarterly results ever.
"Besides being a seasonally weak quarter and the industry
continuing to be plagued by weak yields, flight cancellations at
MAS will weigh on fixed overheads," he wrote in a June 23 note.
Shares in Malaysian Airlines, rated "sell" or "strong sell"
by 11 of 13 analysts according to Thomson Reuters data, have
dropped 35 percent this year so far.
($1 = 3.1740 Malaysian Ringgit)
(Editing by Pravin Char)