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Can MAS take off again?

  • MAS can only resolve its long-standing problems in the absence of government intervention.

Sin Chew Daily

Constantly in the red, the question now arises whether Malaysia Airlines should stay or leave.

Khazanah announced that it suffered a loss of RM6.3 billion over the past one year, of which RM3.7 billion was from the national carrier.

Despite the fact Khazanah has kept pumping in cash to revive the ailing airline, MAS keeps losing money.

In view of MAS' continuous financial loss, the cash-strapped new government has proposed to close down the national carrier.

In addition, the government has mulled two other alternatives: to sell the airline, or to refinance it in a bid to resolve its debt issue.

Malaysia Airlines has attributed its loss to several factors, including manpower shortage, stiff industrial competition, seat oversupply, and fluctuation in international oil prices and the ringgit exchange rates.

MAS is no longer Khazanah's core business now. With poor return on the astronomical sums of money put in, the sovereign wealth fund indeed has the intention of disposing the airline's shares if there is no objection from the government.

But, is this eventuality what MAS really deserves? It used to be a company that carried the pride of the nation, and its closure could trigger a whole string of problems including unemployment of its existing staff, which needs to be taken into serious consideration and handled with care.

MAS is suffering from highly complicated issues, but none comes more crucial than its lack of independence. The airline cannot operate freely without government intervention. MAS can only resolve its long-standing problems in the absence of government intervention.

Analysts are of the opinion that given the space for fair competition, MAS should be able to revive its glorious past. Unfortunately the national carrier has a huge burden on its back. It needs to take care of not just the country's fiscal balance and corporate social responsibility, but also the market.

In view of this, it is imperative tor MAS to have a capable management with new innovation and mentality in order to run the company efficiently.

MAS needs to be more transparent in awarding its contracts through open tenders instead of awarding the contracts to "cronies". MAS will not be able to take off again if this old habit remains.

Some feel that choosing the right strategic partners for MAS is a much better option than closing it down, citing the example of Proton.

The aviation industry is getting increasingly competitive today. MAS is not the first airline that has suffered huge losses. Cathay Pacific and Singapore Airlines were once losing money too, but they have now managed to turn around!

If they can do it, there is no reason MAS cannot.

 

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