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No quick solutions for ailing Malaysia Airlines
Publication Date : 11-06-2014
Khazanah Nasional Bhd, the major shareholder of Malaysia Airlines (MAS), has dismissed any quick solution to the problems facing the ailing carrier, saying it is working on a plan it hopes to unveil in six months to a year’s time.
MAS managing director Tan Sri Azman Mokhtar said it was exploring all options to map out a plan to resolve the airline's problems and put it on a sustainable business model.
Azman said MAS could weather the storm in the short term.
“Over the immediate term I believe there is enough headroom in terms of finances, but over the medium to longer term, this thing needs to be solved in a sustainable manner,” Azman said at a press conference at Invest Malaysia 2014 yesterday.
He also acknowledged the tough challenges the current MAS management headed by group CEO Ahmad Jauhari Yahya was facing.
“For the leadership to do this (sustainable business model) is very challenging and we appreciate that Ahmad Jauhari and his team are working very hard,” he said
He said Khazanah which was currently doing a study on the matter, including consulting with its stakeholders, would make a decision to be submitted to the government in the immediate term.
“We have done a lot of work, more so especially in the past 1 and a half years. We need to look at all options and I categorically say that all options are being reviewed given the seriousness of the situation and the importance of MAS to the country. We have to be balanced to safeguard the interests of taxpayers, Government, shareholders and bondholders,” Azman said.
“Over the past 10 years, Khazanah has injected some 5 billion ringgit(US$1.56 billion) into MAS. We will continue to play our role as a major shareholder while being also a custodian of taxpayers money. We have to ensure any injection of funds is well deployed,” he added.
Apart from MAS, the other company in Khazanah’s portfolio in the aviation sector is its investments in Malaysia Airports Holdings Bhd (MAHB).
Khazanah’s plan for MAS would take into account three factors that has bogged down the airline. The first is the ability of the plan to drive the right outcomes in respect of the employees’ work culture, internal alignment and intra-company work.
The second is to address the external support that the carrier needs for the plan to be implemented from the government and the public who are the stakeholders and the third is to have a leadership to carry out the plan.
It is learnt that the plan needed to address issues that MAS has consistently faced, such as the high cost structure, interference from politicians and attracting the right kind of people and partners to help steer the airline to its next phase of growth.
Among the reasons for the high cost structure is the bloated employment workforce and fixed long-term contracts on its procurement and also its employees. MAS being a national carrier also had more than its share of meddling from politicians in the past.
Asked to comment on MASkargo Sdn Bhd’s CEO Mohd Yunus Idris who had recently resigned, Azman said: “People come and go (and) the business should make more money.” In relation to the employment contract of Ahmad Jauhari, Azman said he was not prepared to comment on that at this point in time.