The Malaysian Association of Tour and Travel Agents (MATTA) has urged Putrajaya to look into financial support for the national carrier, Malaysian Airlines (MAS) to ensure its readiness for the post Covid-19 period.
This is in response to the suggestion by Dato’ Seri Mohamed Azmin Ali, Senior Minister of International Trade and Industry on the possible merger between Malaysia Airlines and Air Asia Group
MATTA President Datuk Tan Kok Liang says, “Countries worldwide are expected to bailout their national carriers. For instance, the Singapore government has arranged up to S$19 billion (US$13 billion) of funding to support Singapore Airlines (SIA) through the coronavirus crisis. And, Hong Kong has provided a relief package of HK$2 billion (US$258 million) to ease the liquidity pressure of airlines and aviation support services operators.”
“In addition, the US government has reached an agreement in principle with US major airlines over the terms of a $25 billion bailout, while the European Commission has approved approximately €455 million loan guarantee scheme to Sweden, to help the airline industry as it struggles to weather the economic fallout from the Covid-19.”
“The International Air Transport Association (IATA) has also strengthen its call for urgent action from government worldwide to provide financial relief to airlines. It is estimated that the Covid-19 will lead to losses for global airlines amounting up to US$314 billion (RM 1.36 trillion), 25% more than previously forecast.”
“Without airlines to bring in millions of tourists in and out of Malaysia, there will be no viable tourism industry. They are the first in the long line of supply chain in the tourism industry that includes airports, road and rail transport, accommodation, food and beverage, entertainment and shopping plus business, education and health services.”
“Airports in Malaysia registered a decline of 27.6% with 18.4 million passenger movements. International and domestic passenger movements decreased by 32.4% and 22.4% respectively. Aircraft movements declined by 11.9% in Q1 2020 over Q1 2019. International and domestic movements declined by 17.5% and 8.2% respectively over Q1 2019.”
“But in Q2 2020 it will be worst off as more countries have closed their borders and most airlines have come to a standstill. The decline percentage will hit the high 90s. Q3 2020 will be no better. If there is any hope of recovery, perhaps we can start to look at the final quarter (Q4 2020).”
“The downfall of movement traffic was severely impacted by the travel restriction imposed due to Covid-19 and many airlines are now vulnerable of having a material impact on their financial performance.”
The Association has also pointed that a massive bailout fund is needed to help the national carrier in order to go through the current crisis and expand afterward.
According to MATTA, the bailout will not only tide it over a short-term financial liquidity challenge but will also assist in putting forth growth far off the pandemic.
“However, steps need to be taken in making air travel palatable to the public again. This may involve a new way of travel with changes for in-flight amenities, health kiosks and conducting rapid on site Covid-19 test certificates for passengers,” said Tan.
On 14 April 2020, Malaysia Airlines has also announced that its flights will resume between Peninsular Malaysia and Sabah and Sarawak.