Malaysia Airlines, what was once a symbol of our country’s prestige among the world’s best airlines is now a burden of a national carrier, having been unable to turn a profit since it was taken private in 2014.
In fact, in the words of industry analysts, MAS has been “bleeding” money, after Khazanah Nasional Bhd took a majority stake in the airline. The sovereign wealth fund, who is MAS’s single shareholder, has spent RM6 billion (US$1.5 billion) over the last three years trying to put the airline in the black again, to no avail. Many are saying that it’s time to suck it up, and pull the plug.
Speaking to New Strait Times, Shukor Yusof, the founder of Endau Analytics, a Malaysia-based aviation consultancy, did not mince his words:
“MAS ought to shut down. There is no economic or financial rationale in maintaining it in its current condition. A loss-making business can’t continue indefinitely,” he told the New Straits Times.
If the national airline was shut down, its assets, such as aircraft and properties, could be used to repay debts while some of its workers could be redirected to other airlines, such as Malindo Airways or AirAsia.
“What’s more important, in my view, is to take to task the people who have been responsible for ruining MAS. There must be accountability.”
He’s not alone; Moshin Aziz, a financial analyst from Maybank, one of Malaysia’s largest banks, who is tasked with forecasting moves in the aviation industry has echoed the sentiment, saying that the best way forward for MAS would be to “discontinue operations” as plans to turn a profit have been unsuccessful.
Aziz adds:
“Should Malaysia have a national airline? That argument is becoming weaker because we have been bailing it out many times.
“Nowadays, the attachment and sentiment to the national airline is not as strong as before.
However, Khazanah’s managing director has dismissed the doomsday predictions, saying that the airline has “a multiplier effect of eight to 10 times,” bringing in tourists for each dollar spent on the airline.
Some have suggested that MAS might benefit from unloading or shutting down some of its less profitable subsidiaries, which include Firefly, MASwings, MAB Kargo, AeroDarat Services, MAB Leasing, MAB Pesawat and MAB Academy. Others wonder if they might slim down their considerable large fleet, and streamline services.
After Khazanah announced a loss of RM7.3 billion in 2018 (US$1.8 billion) this Tuesday, news hit that half of the costs were due to the carrier’s unprofitability.
They have since asked the airline for a new strategy.
Reader Interactions