The government is expected to announce a more comprehensive set of measures this week/Bloombergby Bloomberg
Malaysia is exploring the possibility of bailing out domestic airlines that have been hit hard by the coronavirus outbreak.
Officials have been studying ideas including setting up a vehicle to take over the debt of companies like Malaysia Airlines and AirAsia Group.
They have been discussing whether to provide financial support to other parts of the economy affected by the pandemic such as the tourism, real estate, and oil and gas industries.
Malaysia Airlines has separately been in talks with lenders about modifying its borrowings, the people said. The country’s flagship carrier, which continues to wallow in the red since announcing its turnaround plan in 2015, has asked for support from the government.
According to the International Air Transport Association (IATA), airlines worldwide could lose $252 billion in revenue this year from the coronavirus pandemic, threatening the survival of the industry.
The anticipated hit is more than double the size of the decline mooted by IATA earlier this month, reflecting the steep downward spiral of many carriers as they grapple with a crisis more severe than anything the sector has ever faced. IATA, which represents about 290 airlines globally, said only around 30 airlines have reasonably healthy debt and earnings.
Bank Negara Malaysia this week rolled out additional measures to help individuals and smaller businesses facing financial constraints because of the pandemic. The Prime Minister Muhyiddin Yassin said that the government would announce a more comprehensive set of measures this week.