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MAS employees told to brace for complete overhaul in new template

Publication Date : 12-08-2014

 

The management of Malaysia Airlines (MAS) has told its employees to brace themselves for a complete overhaul of the ailing airline, as it undergoes its biggest crisis yet.

In a meeting with representatives of the unions yesterday, union members said MAS chairman Md Nor Yusof had told them that there would be a new template for MAS at the end of the exercise.

According to union representatives, they were told that previous restructuring exercises had been done on a piecemeal basis.

“This time around, it is going to be a comprehensive exercise. No longer piecemeal measures ... this is the message we got,” a union representative who had attended the meeting at the MAS office in Subang told StarBiz yesterday.

There were more than 30 unions represented at the meeting, where Md Nor was accompanied by the top management of MAS.

According to some union representatives, the new template could likely involve the setting up of a new holding company, renegotiations of all contracts and an airline without unionised staff.

For instance, the workforce in Firefly, which is a sister company of MAS, is not unionised.

The loss-making MAS is going through a tough period that no other airline has gone through in aviation history. Within a space of four months since March 8 this year, two of its planes have crashed.

The first was flight MH370 that went missing on March 8 during a flight from Kuala Lumpur to Beijing. It remains the biggest aviation mystery to date.

Then, on July 17, a flight from Amsterdam to Kuala Lumpur was shot down while flying over strife-torn Ukraine.

The airline reported an 1.17 billion ringgit (US$366,400 million) net loss for the financial year ended Dec 31, 2013 due to competition from low-cost carriers and other full-service airlines. The two aviation tragedies have added to its financial woes.

According to a union official, Md Nor cited previous restructurings in MAS such as the Widespread Asset Unbundling, or WAU, implemented in 2002 undertaken then to address its need at that time, which was to restructure the balance sheets.

Similarly, the exercises undertaken by his predecessors were to address the airline’s need at that particular time.

“We were told that there was no effort for a wholesome restructuring, perhaps because it had lacked the political will then, or there were too many obstacles, or those in charge had feared undertaking an indepth restructuring for fear of unravelling things that were not meant to be revealed. So, the airline has suffered to this date,” said an official.

The WAU, implemented in 2002, had its limitations because the company given the mandate, Bina Fikir Sdn Bhd, was told that the restructuring should not involve laying off employees, cutting down on route networks, and there should not be any haircuts for suppliers and bankers.

The plan for a new template has come about after the major shareholder of MAS, Khazanah Nasional Bhd, on Friday announced a proposal to take MAS private, offering shareholders 27 sen a share to mop up the remaining 30.63 per cent it does not own in the national carrier.

MAS yesterday issued a statement that its leadership had met with representatives of the various employee unions and other associations as the first step towards informing and engaging employees on the future restructuring of the airline.

“While there are still many details about the future which will be forthcoming, MAS is committed to working closely with all its employees and airline partners throughout this process following the principles of fairness, transparency and compassion,” MAS said.

A union official said that the chairman did not really answer questions on whether the current collective agreements with the unions would be honoured.

“All he said was that they were working on a new template,’’ said the union official.

Details on the job and salary cuts, if any, will only be known at the end of the month, as that is when Khazanah aims to release details of its plan.

But some divisions within MAS were already preparing for the workforce to be cut by between 20 per cent and 25 per cent and had started to prepare their staff to start looking for jobs elsewhere, said an employee.

“The staff are already demoralised and fear has set in. There seems to be a sense of insecurity. But more troubling is the methodology MAS will use to decide on the layoffs. Will an independent body be appointed or will it be done unilaterally?

“There is a need for transparency and accountability and those in charge need to understand that in good and bad times, the staff have continued to work and that is why the airline is still flying till today,” said an employee.

MAS has 19,755 employees.

 

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