The Malaysian government’s recovery plan to revive ailing Malaysia Airlines (MAS) should not be to the detriment of other local carriers, said a lawmaker.
Solon and Public Accounts Committee (PAC) chairman Datuk Nur Jazlan Mohamed said the federal government must look at the aviation industry as a whole to ensure that the announced restructuring plan by Khazanah Nasional Bhd, the government’s investment corporation, does not put other airlines at a disadvantage.
“We want the government to look at it holistically and not just focus on strengthening MAS status,” he told local media.
“If we use this law to turn around the national carrier especially in its ailing condition without proper planning, it will jeopardize other airlines,” he added.
PAC is tasked to examine the country’s accounts and appropriation of sums granted by Parliament to meet public expenditures.
Khazanah Nasional, which has taken over the control of MAS, earlier unveiled a 12-point restructuring plan for the troubled national carrier that is now on the brink of bankruptcy after two devastating disasters this year.
The MYR6-billion (US$1.9 billion) recovery plan includes replacing MAS’s CEO, massive job cuts, route changes, and the possible sale of Khazanah’s stakes to private investors.
Prime Minister Datuk Seri Najib Tun Razak has said the fund infusion is not a bailout but an investment by Khazanah Nasional because its capitalization must be recovered.
Under the recovery plan, the government hopes to see a turnaround for the airline within three years.
A search for a new chief executive is now being conducted and the choice will likely be announced by year-end. Staff size will be reduced by 30 percent to see the nearly 20,000 workforce trimmed to 14,000, and flights will be refocused to the more profitable regional routes rather than to the loss-making long-haul destinations.
The airline is also renegotiating its current supply contracts that have been described as uncompetitive.
Khazanah Nasional is the carrier’s majority stakeholder and already owns 70 percent of Malaysia Airlines, but it earlier announced it wants to obtain all of the carrier’s remaining shares and de-list it as it implements its revamp strategy. The corporation may then consider selling all or some of its stake to a private investor after re-listing.
Over the years, MAS has been hard pressed to meet the challenges of rising industry competition, and logged its sixth straight quarterly loss for April-June with a loss of MYR307 million compared to MYR176 million in the year-earlier period amid forecast of more losses for the rest of the year. Operating revenue fell 7 percent to MYR3.34 billion.
MAS’s Flight 370 disappeared on March 8 while flying to Beijing from Kuala Lumpur with 239 people on board. On July 17, Flight 17 crashed in eastern Ukraine, killing 298 passengers and crew, after being slammed by a surface-to-air missile.
Photo: code_martial
