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MAS administration progressing after 12 months, more work remains

Extension of moratorium required to complete remaining tasks

KUALA LUMPUR, 25 March 2016 – The Administrator of Malaysian Airline System Berhad (“MAS”) today announced that the first year of administration has seen key milestones achieved, with more to be done, necessitating an extension to the current moratorium.

The Administrator, Dato’ Mohammad Faiz Azmi, was appointed on 25 May 2015 to ensure effective, efficient and seamless transition of the business, property, rights, liabilities and affairs of MAS to Malaysia Airlines Berhad (“MAB”). MAB commenced full airline operations on 1 September 2015 and MAS ceased operations on the same day.

Dato’ Mohammad Faiz, said: “Immediately upon my appointment, my team and I reviewed plans to stabilise the day-to-day operations of MAS, and we worked closely with MAS personnel to ensure business continuity right up to 31 August 2015. Disruptions were kept under control and the transition of operations to MAB was largely seamless, enabling it to commence operations as the national carrier successfully on 1 September 2015.”

“I have been in active discussions with the affected and relevant stakeholders of MAS. These discussions are complex as they involve laws and tax implications across various jurisdictions. Because of these reasons and to achieve the best possible outcomes, we have sought and received approval for an extension of the current moratorium.”

The extension is for a further 12 months until 24 May 2017, as provided for under the Malaysian Airline System Berhad (Administration) Act 2015 (“MAS Act”).


Key milestones achieved in the first year of Administration

1. Transfer of selected assets and liabilities to MAB

Selected assets and liabilities critical to MAB's airline operations have been transferred from MAS to MAB. These include land and buildings, workshop facilities, offices, stations, aircraft and motor vehicles as well as contracts for engineering services, legal services, fuel supply, catering, security, system support and working capital facilities among others. 

2. Safeguarding the welfare of the Next of Kin of MH370 and MH17

It is the priority of the Administrator that all Next of Kin are fully compensated in accordance with the applicable International Convention and law. To date, a fair number of Next of Kin of MH370 and MH17 have received the full compensation.

Remaining Next of Kin who have yet to receive the full compensation, are either in communication with MAS or its appointed solicitors, or have filed claims in courts of competent jurisdiction to preserve their rights.

MAS is in constant communication with the Next of Kin in order to ensure that they are as fully informed on all matters arising from the incidents.

A special dedicated team which reports to the Administrator, the Post Accident Office (PAO), keeps track of all matters associated with the MH370 and MH17 incidents. PAO oversees and coordinates Next of Kin claims and compensation, and acts as the focal point of contact for government agencies, authorities and third parties connected to the incidents.

Dato’ Mohammad Faiz said: “The welfare of the Next of Kin of MH370 and MH17 passengers and crews has always been our utmost priority.  In the case of MH370, all passengers’ related claims have either been settled or filed in Courts of various jurisdictions. Similar to MH370, all Next of Kin of passengers on board MH17 were briefed on the two-year limitation period under International Convention and law, which ends on 17 July 2016, to ensure that those affected take the necessary steps to preserve their legal rights.  All Next of Kin of MH17 passengers are strongly encouraged to file their claims by 17 July 2016 if they have not been settled beforehand.”

“For the Next of Kin of crew members of both MH370 and MH17 who have yet to conclude a settlement with MAS, active discussions are taking place towards achieving an amicable settlement.”




1. The Malaysian Airline System Berhad (Administration) Act (MAS Act) was passed by Parliament in end 2014 and gazetted on 5 January 2015.

The MAS Act provides for:-

  • an establishment of a new entity, Malaysia Airlines Berhad (MAB), with a new business model to replace MAS as the national carrier; and
  • an effective, efficient and seamless means to transition the business, property, rights, liabilities and affairs of MAS to MAB.

Pursuant to the MAS Act, Khazanah appointed Dato’ Mohammad Faiz Azmi, as the Administrator for MAS (the Administrator) on 25 May 2015. 

2. Moratorium provided under the MAS Act

Section 11 of the MAS Act provides a moratorium over MAS.  Section 12(1) of the MAS Act states that the moratorium is for a period of twelve (12) months from the date of appointment of the Administrator, that is, from 25 May 2015 to 24 May 2016.  Section 12(2) provides for an extension of the moratorium for a period of not more than twelve (12) months by YAB Prime Minister upon being satisfied that the circumstances warrant such extension.


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