KUALA LUMPUR: Rebuilding airlines’ operations (network and services) will require a significant financial commitment if carriers wish to minimise their dependency on government financial aid, according to aviation experts.
However, market observers said the aspiration might be too early as it is not within the airline’s reach given the current circumstances to rebuilding its operations and making its core business commercially viable.
Airlines had requested governments’ financial assistance to keep their operation afloat amid significant lower load factors due to weakening demand for air travel, forcing the majority of its asset underutilised, exacerbated by travel restrictions following the Covid-19 pandemic past 18 months.
Certain quarters believe airlines should also consider joint-venture or reinforcing their existing alliances to reduce operational costs.
International Civil Aviation Organisation (ICAO) air transport officer Rosida Ismail said access to a reliable and greater capital market would be one of the options that should be made available for airlines.
“Currently in Malaysia, airlines are required to maintain a majority Malaysian ownership (of 50 per cent plus one share), hence limiting the source of funds to majority domestic capital market,” he told the New Straits Times (NST) recently. Read more