Malaysian Airlines System has failed to make $1.8-million payment due
under a lease agreement the airline has with Virginia-based World Airways for an MD-11
all-cargo plane.
World Airways, itself struggling financially, made the announcement
about MAS to warn investors of a potential "material adverse effect" on its
earnings if the debt is not resolved.
MAS owes World a total of $22.1 million under the wet-lease agreement through
September 2000. World said it is in discussions with MAS and also looking for another
customer for the MD-11.
MAS has been a World Airways customer since 1981. Observers have said MAS is
more than $3 billion in debt. World suffered a similar default on lease payments from
Philippine Airlines two years ago, before the airline temporarily shutdown.
MALAYSIAN AIRLINES DEFAULTS ON FREIGHTER PAYMENT
MALAYSIAN AIRLINES DEFAULTS ON FREIGHTER PAYMENT
