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Myanmar mulls $24 million loan to keep national airline afloat
The government is considering a US$24 million bail-out plan to help Myanmar National Airlines (MNA) cover its operational expenses, U Win Khant, Permanent Secretary of the transport ministry, said during a Myanmar tourism forum on June 1.
“The situation at MNA is pretty bad and the airline could require state protection to remain solvent,” said U Win Khant.
MNA is currently burning almost $4.8 million on average a month on operational expenses such as fuel, insurance and repairs. It has so far racked up $24 million in debt it has not been able to pay for over the past five months and is now asking the Ministry of Finance, Planning and Investment (MOPFI) for a loan.
The airline has not been able to rake in much revenue since March, when COVID-19 was declared a global pandemic and the first cases were reported in Myanmar. It has so far been operating cargo and relief flights to cover some costs during the COVID-19 period.
U Win Khant said although the loan is being considered, the airline must reduce its costs by laying off staff who are redundant or implement pay cuts.
A spokesperson from the transport ministry told The Myanmar Times that a loan will likely be provided to support state-owned MNA and the authorities are currently still negotiating details such as the interest rate and duration of the loan.
He added that the airlines have yet to be considered in Myanmar’s economic recovery plan and that loans will be provided to those that require financial support. According to industry insiders, all the local airlines will need bail-outs from the government or other loans to remain in business. So far though, there have been no requests for help from the private airlines.
Source: https://www.mmtimes.com/news/myanmar-mulls-24-million-loan-keep-national-airline-afloat.html