Malaysian low-cost carrier MYAirline abruptly suspends operation, citing “financial pressure”

MALAYSIA: On Thursday (12 Oct) morning, MYAirline Sdn Bhd, a low-cost carrier, announced the immediate suspension of its flight operations until further notice.

This decision marks a significant development as it became the first Malaysia-based airline to collapse post-pandemic, despite the aviation industry’s gradual recovery after years of dealing with the impact of COVID-19.

This announcement follows the airline’s statement on Sunday (8 Oct), where it revealed that it was in the advanced stages of “finalizing strategic partnerships“.

Moreover, just on Monday, the airline received an extension for its air operator’s certificate from the Civil Aviation Authority of Malaysia, granting it the ability to continue operating commercial passenger flights for an additional two years, up to 2025.

In an early Thursday morning statement, MYAirline explained that this “extremely painful decision” was a result of significant financial pressures that forced the suspension of operations.

This step was deemed necessary to facilitate shareholder restructuring and the recapitalization of the airline.

In a statement from the Board of Directors, MYAirline said “We deeply regret and apologize for having to make this decision as we understand the impact it will have on our loyal passengers, dedicated employees and partners. ”

“We have worked tirelessly to explore various partnership and capital-raising options to prevent this suspension. ”

“Unfortunately, the constraints of time have left us with no alternative but to take this decision.”

MYAirline has issued guidance for its affected passengers, instructing them to contact the airline at [email protected].

“In the meantime, we are advising affected passengers to not head to the airport and seek for alternative travel arrangements to their destinations.”

The airline emphasized that its board, shareholders, and the entire MYAirline team are dedicated to putting in relentless efforts to reinstate flight operations as swiftly as possible. However, they are currently unable to provide a specific timeline for the resumption of services.

MYAirline expressed its deep regret for any inconveniences or challenges resulting from this suspension and pledged to provide updates as they become available.

MAVCOM pressures MYAirline for passenger refunds While investigating employee payment issues

Meanwhile, the Malaysian Aviation Commission (Mavcom) had urged the MYAirline to provide refunds to passengers impacted by the suspension of its flight operations

In an official statement on Thursday, Mavcom revealed that it had directed MYAirline to halt the sale and booking of its flights across all booking platforms until further notice.

The aviation regulatory authority further requested MYAirline to inform affected customers about the flight suspension and ensure that the notification is disseminated through the airline’s various communication channels.

“The commission stands firm that MYAirline is still liable to refund consumers who have purchased tickets with the airline but are unable to travel.”

Mavcom has initiated an investigation into MYAirline following internal reviews and complaints it has received.

The investigation pertains to various issues, including the airline’s failure to fulfill its statutory obligations in terms of employee payments and other related matters.

Earlier speculations surrounding MYAirline’s financial struggles and debts

Over the past few weeks, rumours have been circulating about MYAirline facing severe financial difficulties.

Allegations include unpaid staff wages, delayed payments to service providers, and challenges in securing funding for new aircraft leases.

Furthermore, reports indicate that MYAirline had reached out to Abang Abdillah Izzarim Abang Abdul Rahman Zohari, the son of Sarawak Premier Tan Sri Abang Johari Tun Openg, for potential investment.

Transport Minister Anthony Loke Siew Fook encouraged MYAirline to engage with the Malaysian Aviation Commission (Mavcom), the economic regulator, to address any issues they are experiencing.

He suggested that the commission should be the first point of contact for assistance related to facilitation, licensing, and regulatory support.

In December 2022, MYAirline began its operations, utilizing a fleet of nine Airbus A320-200 aircraft stationed at Terminal 2 of the Kuala Lumpur International Airport.

The airline had set a target to increase its aircraft fleet to 20 by the end of the year and to extend its flight routes to include destinations in other neighboring countries within the Southeast Asian region.

MYAirline’s board is composed of the following individuals:

1. Datuk Allan Goh Hwan Hua – Co-founder and major shareholder of MYAirline.
2. Sean Goh Tze Han – Son of Datuk Allan Goh Hwan Hua.
3. Datuk Seri Azharuddin Abdul Rahman – Former Director General of the Civil Aviation Department of Malaysia.
4. Datuk Abd Hamid Mohd Ali – Former Chief Operating Officer of Malaysia Airports Holdings Bhd (MAHB).
5. Rayner Teo Kheng Hock – Co-founder and former Chief Executive Officer of MYAirline.
6. Jothi Prakash Murugan – Director at Trillion Cove Holdings Bhd.

Teo, who had been leading the airline since its establishment, resigned from his position on October 8th, citing health-related concerns.