In the boldest move yet to overhaul the ailing Malaysia Airlines (MAS), the Government has decided to bite the bullet by taking the national carrier private to enable a massive restructuring move.
It will be delisted from Bursa Malaysia in a corporate exercise that will shield the airline from public glare as it carries out painful measures, including job cuts of its 20,000 workers, downsizing of operations and renegotiation of contracts.
Prime Minister Datuk Seri Najib Tun Razak said the national carrier had to undergo wholesale change to deliver a wholly different outcome.
“Only through a complete overhaul of the company can we deliver a genuinely strong and sustainable national carrier. Piecemeal changes will not work,” he said.
Previous moves to restructure MAS had met with firm resistance from workers’ unions as well as politicians. This time around, Khazanah Nasional Bhd, the largest shareholder with nearly 70% stake, has the blessings of the Government and the National Union of Flight Attendants (Nufam).
Khazanah, the Government’s strategic investment fund, announced that it had submitted a formal request to MAS’ board of directors to buy out the remaining shares.
“Today’s proposal for delisting represents the first stage of the restructuring scheme. Khazanah is in the final stages of completing the overall restructuring.
“Upon due process and approvals from the relevant authorities, regulators and the Special Shareholder – the Minister of Finance Incorporated – we expect detailed plans to be announced by the end of this month,” it said in a statement.
The restructuring will require all parties to work closely to undertake a complete overhaul of the national carrier on operations, business model, finances, human capital and regulatory environment.
“Nothing less will be required in order to revive our national airline to be profitable as a commercial entity and to serve its function as a critical national development entity.”
MAS’ financial problems have been compounded by the twin tragedies of Flight MH370 and Flight MH17.
MH370 disappeared without a trace in March with 239 people on board. The search for the plane is still going on in the southern Indian Ocean.
MH17, which was heading to Kuala Lumpur after leaving Amsterdam, was shot down with 298 people aboard in a Ukraine war zone last month.
The national carrier, which used to carry a strong brand name in the industry by winning many coveted awards for both service and operations, such as the World’s Best Cabin Staff in 2012, is now making headlines for the two recent air tragedies.
Prior to these incidents, MAS had one of the world’s best safety records with just two fatal accidents in nearly 70 years of operations – the crash of a Boeing 737-200 on a domestic flight from Penang to Kuala Lumpur in Tanjung Kupang, Johor, which claimed 100 lives in late 1977 and a Fokker-50 crash at the Tawau airport in 1995 which killed 34 people. — The Star