Khazanah Should Be Left Alone To Steer MAS Back To Profitability
KUALA LUMPUR, Nov 20 – Khazanah Nasional Bhd, the government’s investment arm, should be left alone to steer financially-troubled Malaysia Airlines (MAS) back to profitability. Federation of Chinese Associations Malaysia Deputy Secretary General (Hua Zong) Datuk Prof Dr Chin Yew Sin strongly feels that one has to be realistic in that, there is already a gameplan in place by Khazanah, to revitalise the national airline.
“And it should not be derailed just because a private company has made a bid,” he added, in the light of newly-formed Jentayu Danaraksa (JD), having proposed an alternate plan to save loss-making MAS. “I think the government has to stick to its plan, as if you let somebody else take over, then Khazanah would not have a free hand in restructuring (MAS),” said Chin, whose outfit represents all the major Chinese associations throughout the country.
“In addition, the other company’s proposal is not so comprehensive. It says it wants to save 6,000 jobs, when actually it’s impossible, as everyone knows that MAS has too many at (around) 20,000 workers,” the prominent businessman said. JD was reportedly set up in August by former aviation industry executives and their business partners.
With MAS being the pride of the nation, Chin said “the government must make sure that it can be turned around and put (it) back on (its) proper footing.” Commenting on JD’s proposal, he said it is easy if the company just took over the money-making operations of the national airline. Citing an analogy from toll roads, Chin said profits can be easily made “if I can take over tolls assets that make money and discard the ones that don’t.”
He said some major challenges that affected the viability of MAS had already been made known, and it included having too many employees, high-priced suppliers and flights to non-profitable routes. “So what’s needed now is to fix the problems (at MAS) and do it without political interference,” he added. Chin is optimistic that MAS can be turned around if left to professionals to do the job as other airlines had done it before.
“So, I don’t think the government should accept any offer from the private sector right now,” he said, adding, the company which made the turnaround proposal may not have the whole picture and only wanted to buy over certain assets of MAS. “This is not good as the government needs a holistic solution to resolve the MAS problem once and for all,” he said.
Chin said a private company may also find it difficult to come up with the funding which MAS needs. “It will need to rely on banks and they are very careful with their lending now as MAS’ gearing is relatively high at 290 per cent. “But with Khazanah’s funding, its gearing will fall to 130 per cent. So a private company coming in to facilitate MAS’ revival will need deeper pockets than the RM6 billion proposed by Khazanah in its 12-point plan,” he added.
Commenting on support from JD for the Malaysian Airline System Employees Union, the largest union in MAS, Chin said: “I think there are several reasons why MAS is losing money. Among them is that it has too many staff. It is also a commonly known fact that MAS’ supplies are too expensive.”
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