‘Technically’ bankrupt MAS needs help

(Bernama) – In the face of prolonged losses, Malaysia Airlines (MAS) and its employees will have to go the extra mile to restore the pride of Malaysia and the national carrier.

The airline that gave most Malaysians their flying experience is now technically bankrupt.

“Currently, MAS remains in business even though it is technically bankrupt due to assistance from the government because the company is a national pride,” said an investment strategist who declined to be identified.

“But this time around the government has to do it right,” he said when referring to plans to turn around the airline as the government is its major shareholder.

MAS has tried to make many turnaround plans in the past whenever it faced falling revenues.

However, its share swap deal with AirAsia was aborted after strong protests from the premium service airline’s employee unions and some sections of the public, as it was perceived that MAS was getting a raw deal.

Now, it has to come up with a new turnaround strategy to maximise yields from its operations and reduce costs wherever possible.

One of the plans being floated is a possible move of its offices from Subang to its main operational hub at Kuala Lumpur International Airport (KLIA) in Sepang.

But this idea of “going the extra mile” to cut costs is said to have met strong opposition from the affected staff.

National Chamber of Commerce and Industry of Malaysia secretary-general Syed Hussein Al Habshee feels that the airline’s management and employees should continue to have an open dialogue on the matter as this is the only way to achieve better understanding.

Speaking to Bernama, he said the issue of moving or not should be the management’s decision alone, and it must have solid reasons behind that move.

Syed Hussein said while the employees’ views should be considered, the airline’s financial perspective also would be taken into account.

Strong bargaining position

It makes practical sense over the long term for MAS to have its offices next to its main operational hub at KLIA, said the investment strategist, who believed the airline’s present management is more than capable of lifting it out of trouble if given the right support and opportunity.

But whether it is a good time to implement the relocation in view of its financial position will have to depend on its priorities and whether the benefits of moving outweigh those of deferring such a decision.

The employees, he said, should also not take advantage of their strong bargaining position at the moment, and should instead adopt a “give and take” attitude for the benefit of the airline.

“Just because the unions have many members, they should not make demands on selfish reasons,” an analyst at an investment bank said.

In managing a company, first and foremost, he said the management must be practical and should not be listening to the employees 100%.

“At the end of the day, for people like myself, let us say, if the management makes a decision that is good for the company, I have to follow or find another job.

“Today the fundamentals of making business work is all about financials. The bottom-line is what everybody is looking at,” he added.

Another analyst said MAS and national carmaker Proton shared a similar problem.

But he felt that the government did not have a suitable candidate like DRB-Hicom Bhd to take over MAS at present “because it’s financially too big and there are also legacy issues and the need to uphold national service”, said the analyst, who also declined to be quoted.

If MAS moved to KLIA, its existing building in Subang could be used for something else that could generate income for the airline, he said.

He agreed that the only obstacle for such a move was resistance from the unions.

Some quarters believed that opposition to the relocation had stemmed from a perception that the valuable piece of property in Subang would benefit other parties instead and not MAS.

Now that MAS is on its own, perhaps it could look at how best to generate revenue from the Subang property.