Fate of Malaysia Airlines hangs in balance

Malaysia Airlines

The Malaysian government will be conducting a study to decide the fate of ailing national carrier, Malaysia Airlines (MAS).

National sovereign wealth fund, Khazanah Nasional – the sole shareholder of MAS – had accounted half of its RM7.3 billion (US$1.8 billion) impairments registered last year in sustaining MAS. This caused Khazanah Nasional to post a pre-tax loss of RM6.3 billion in 2018, its first since 2005, reported TheEdge Markets.

Malaysian government mulls over the future of its national carrier

According to The Star newspaper, Malaysian prime minister Mahathir Mohamad, said at a press conference: “To me, it’s a serious matter to shut down the national airline. We will nevertheless study whether we should shut it down or sell it off, or refinance it. All of these options are open for the government to decide.”

During a briefing on the sovereign fund’s 2018 results, Khazanah Nasional’s managing director, Shahril Ridzuan, stated in a New Straits Times report: “As a shareholder, we think that the important question to be asked is whether every dollar spent on MAS is generating other economic benefits to the country, which the government needs to answer to determine the right level of support for the airline.”

Agents TTG Asia spoken to offered suggestions, from corporatising MAS to revamping the airline.

Adam Kamal, secretary-general at Malaysian Inbound Tourism Association, opined: “Shutting down the national carrier should be a last resort. If the government feels it is unable to carry the burden of maintaining the airline, they should corporatise it I am sure there will be takers. This option may even take MAS to greater heights.”

Kamal pointed to AirAsia as an example of a private company doing well, and stated that he was confident that if MAS is corporatised, “it will have a bright future”.

Richard Vuilleumier, managing director, Panorama Holidays, added: “What needs to be done is to re-strategise and revamp the airline and to have good leadership at the top management level who knows the aviation industry, and not politicians.

“As it is, MAS is not really benefiting agents who are selling longhaul as the only longhaul destination it flies to is London. To further grow the inbound longhaul market, which in turn will see increased tourism revenue, is to have more direct connections,” Vuilleumier added.

Manfred Kurz, managing director of Diethelm Travel Malaysia, agreed: “The ownership of the airline is of no interest to agents as long as it can provide good service, fly on important routes and has plans for further expansion.”

At press time, Malaysian finance minister gave his assurances that the government will not shut down MAS.

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