Malaysia's government is prepared to support its loss-making national carrier, Malaysian Airline System Bhd (MAS), with a loan and may consider selling down its stake, the prime minister said on Friday.
But it will not bail out the carrier, which reported a second-quarter net loss of 368 million ringgit ($97.4 million) this week, blaming higher fuel costs and lower yields.
"What the government can (do to) help, it will help. If (it's) necessary to lend them some money, we will do it," Prime Minister Abdullah Ahmad Badawi told reporters after he met the airline's top management and union leaders.
"There are no plans to bail out MAS, but we want MAS to find its own strength. It must earn the right to survive and earn the right to succeed," he added.
MAS has said it is likely to continue losing money for a third straight quarter and is counting on a new chief executive and a five-year plan to turn the company around.
The government may consider selling down its stake in MAS, Abdullah said, adding that any decision would depend on a business turnaround plan, which would go to the cabinet for review by February.
"We will see later," he said, referring to a stake sale. "I am not saying anything now. I need to see the plan."
The turnaround plan includes "a rigorous and disciplined cash management programme to stop and reduce the cash-burn rate", the carrier said in a statement late on Friday. MAS "seeks avenues to secure immediate short-term cash injection and financing, including sale of assets", it said, adding that it was in talks with the government on the modes of such financial support.
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