KUALA LUMPUR: MYAirline Sdn Bhd's saga has hit a twist as a potential new investor is believed to have pulled out of the deal to buy a controlling stake at the 11th hour.
The life support initially offered to the carrier that is bleeding losses would have help sustain its sky high operational costs.
"It didn't happen. The decision was supposed to be made on Oct 11 but the (new) investor pulled out," sources told Business Times today.
MYAirline announced early this morning that it has suspended operations effective Oct 12 until further notice, without mentioning any timeline for operations resumption.
The low-cost carrier said the painful decision was made due to financial pressures that led to its decision to suspend operations.
The statement confirmed Business Times' reports that MYAirline was financially struggling.
The carrier is believed to be unable to pay its services providers and employees' salaries on time.
MYAirline said its flights are suspended pending its shareholder restructuring and recapitalisation of the airline.
"We deeply regret and apologise 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's board of directors said in the statement.
MYAirline asked passengers who are affected by its flights suspension to contact it at customercare@myairline.my.
The airline advised its passengers to seek for alternative travel arrangements.
There was no mention of refunds in the statement.
Business Times had reported on Oct 11 that MYAirline was close to securing a new investor to help it weather a financial storm.
The new investor was believed to potentially be Sarawak Premier Tan Sri Abang Johari Tun Openg's son, Abang Abdillah Izzarim Abang Abdul Rahman Zohari.
Abang Abdillah is believed to have attended several meetings and town halls with MYAirline recently.
He might have emerged as the top shareholder should the purchase of MYAirline's majority shareholder Datuk Goh Hwan Hua's shares went through.
Goh holds the majority 88 per cent and 10 per cent shares, respectively through two private companies - Zillion Wealth Bhd and Trillion Cove Holdings Bhd.
MYAirline had seen a number of its top executives, including its chief financial officer and chief commercial officer, leaving less than one year in operations.
Its former chief executive officer Rayner Teo left recently, citing health reasons.
Interestingly despite its cash crunch, MYAirline was recently given a two-year air operator certificate (AOC) extension to operate commercially until 2025.
The AOC was given by the Civil Aviation Authority of Malaysia.