Malawi Airlines faces liquidation
The board of directors has declared the airline technically insolvent.
RUSTENBURG, April 12 (ANA) – Malawi Airlines faces liquidation due to escalating costs, according to local media reports on Monday.
The board of directors of Malawi Airlines declared it technically insolvent at its March 25 meeting, daily newspaper The Nation reported.
The Nation, citing company documents, stated that as of February this year the airline had suffered losses of about US$17.86 million and accumulated debts of up to US$17.54 million.
The directors resolved that the airliner was technically insolvent and that it could not continue to trade without a rescue package.
The directors recommended an orderly winding up of the company and the appointment of a liquidator, should the shareholders not approve an injection of capital and should all the requested cost-reduction measures not be approved.
The shareholders are the Malawi government, holding 51%, and Ethiopian Airlines with 49%.
According to the resolutions, the shareholders would inform the board whether the winding up of the company would be followed while the company was operating or by suspending operations.
The airline reportedly lost about US$361,000 between October 2020 and February this year.
The winding up of the airline will leave at least 71 locals jobless.
The airline offers flights from Lilongwe to Johannesburg and another from Lilongwe to Nairobi via Addis Ababa, among other flights.
On March 25, Malawi Airlines suspended all flights for six days from March 26.
Spokesperson Joseph Josiah said in a statement that the suspension was due to operational reasons.
However, flights were further cancelled from April 2 to 6 due to prolonged mandatory maintenance of aircraft in Addis Ababa, Josiah said.
Malawi24 reported that about 118 Malawi Airlines passengers were stranded at Kamuzu International Airport in Lilongwe on April 7 following a last-minute cancellation of their flight.
The passengers were expected to leave Lilongwe for Johannesburg, but the plane did not show up at the airport.
News website Nyasa Times reported that on April 7, low-ranked airport firefighters went on a go-slow strike over promotions.
– African News Agency (ANA); Editing by Yaron Blecher
