‘Suicidal’ to let MAS stay on current course
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‘Suicidal’ to let MAS stay on current course
Disagreeing with a call for Malaysia Airlines (MAS) to seek bankruptcy protection, the DAP said the owner Khazanah Nasional must, however, force the flag carrier to institute drastic measures to reverse its continued losses.
Accusing MAS of showing no urgency despite recording another RM1.17 billion in losses in 2013, DAP secretary-general Lim Guan Eng told the national asset manager that it was unacceptable to allow MAS to continue splashing red ink on its balance sheets.
“Whilst MAS may think that these losses are sustainable because MAS still have cash balances of RM3.9 billion as at end of last year, it would be irresponsible if not suicidal to continue with the ‘business as usual’ attitude,” he said in a statement today.
Lim said Khazanah needed to come to terms with the fact that MAS will not be able to compete so long as it continues to retain its existing cost structure that had not been resolved despite two publicised business turnaround plans.
Instead, he said the airline needed to embrace measures such as open competitive tenders and performance-based assessment for all workers, including top management, to help it weed out the “cronyism and hanky-panky” contributing to its decline.
“Despite the subsidies and grants of tens of billions given by Malaysian taxpayers, MAS has shown that it cannot compete with AirAsia, which is a miraculous success story for Malaysian entrepreneurship despite not getting a single cent from Malaysian taxpayers,” he added.
Illustrating the airline’s drain on the country’s coffers, Lim also said the combined losses of RM4.1 billion from 2011 to 2013 would have allowed Putrajaya to nearly double its latest 1 Malaysia People’s Aid (BR1M) cash hand-outs from RM650 per household to RM1,200.
Lim said, however, that MAS should not declare a bankruptcy as advocated yesterday by Singapore’s Business Times (BT), saying the act would be an embarrassment to the country and detrimental to the airline’s employees.
Pointing out that MAS is bogged down by overstaffing and “lopsided procurement contracts” that run the gamut of operations — from maintenance to catering — the BT said yesterday that filing for bankruptcy under Section 176 of the Companies Act would allow its replacement the fresh start it needs to resuscitate the airline.
It added that there was “no shame” in the route, noting that it was employed successfully by Japan Airlines (JAL) in 2010 when it was able to turn around its fortunes in six months.
Last Tuesday, MAS announced a worse-than-expected fourth quarter result for 2013 that saw it rack up another RM343 million in losses, putting the airline RM1.17 billion in the red for the entirety of 2013.
In 2011, it chalked up a record loss of RM2.5 billion.
In 2005, it underwent a business turnaround plan under Datuk Seri Idris Jala, now minister in the Prime Minister’s Department in charge of the country’s economic performance, which reversed the losses that traced back to the 1997 Asian Financial Crisis.
But despite the publicised turnaround, the airline soon fell back into the red and registered its worst loss in 2011.
In the same year, MAS carried out controversial share-swap with rival AirAsia that was brokered by Khazanah, which was later unravelled following vociferous complaints from lawmakers, airline employees and consumers.
The deal was also ruled to be unlawful by the Malaysia Competition Commission (MYCC) last September, when it fined both airlines RM10 million each under the Competition Act 2010.
The Malay Mail... February 25, 2014
Accusing MAS of showing no urgency despite recording another RM1.17 billion in losses in 2013, DAP secretary-general Lim Guan Eng told the national asset manager that it was unacceptable to allow MAS to continue splashing red ink on its balance sheets.
“Whilst MAS may think that these losses are sustainable because MAS still have cash balances of RM3.9 billion as at end of last year, it would be irresponsible if not suicidal to continue with the ‘business as usual’ attitude,” he said in a statement today.
Lim said Khazanah needed to come to terms with the fact that MAS will not be able to compete so long as it continues to retain its existing cost structure that had not been resolved despite two publicised business turnaround plans.
Instead, he said the airline needed to embrace measures such as open competitive tenders and performance-based assessment for all workers, including top management, to help it weed out the “cronyism and hanky-panky” contributing to its decline.
“Despite the subsidies and grants of tens of billions given by Malaysian taxpayers, MAS has shown that it cannot compete with AirAsia, which is a miraculous success story for Malaysian entrepreneurship despite not getting a single cent from Malaysian taxpayers,” he added.
Illustrating the airline’s drain on the country’s coffers, Lim also said the combined losses of RM4.1 billion from 2011 to 2013 would have allowed Putrajaya to nearly double its latest 1 Malaysia People’s Aid (BR1M) cash hand-outs from RM650 per household to RM1,200.
Lim said, however, that MAS should not declare a bankruptcy as advocated yesterday by Singapore’s Business Times (BT), saying the act would be an embarrassment to the country and detrimental to the airline’s employees.
Pointing out that MAS is bogged down by overstaffing and “lopsided procurement contracts” that run the gamut of operations — from maintenance to catering — the BT said yesterday that filing for bankruptcy under Section 176 of the Companies Act would allow its replacement the fresh start it needs to resuscitate the airline.
It added that there was “no shame” in the route, noting that it was employed successfully by Japan Airlines (JAL) in 2010 when it was able to turn around its fortunes in six months.
Last Tuesday, MAS announced a worse-than-expected fourth quarter result for 2013 that saw it rack up another RM343 million in losses, putting the airline RM1.17 billion in the red for the entirety of 2013.
In 2011, it chalked up a record loss of RM2.5 billion.
In 2005, it underwent a business turnaround plan under Datuk Seri Idris Jala, now minister in the Prime Minister’s Department in charge of the country’s economic performance, which reversed the losses that traced back to the 1997 Asian Financial Crisis.
But despite the publicised turnaround, the airline soon fell back into the red and registered its worst loss in 2011.
In the same year, MAS carried out controversial share-swap with rival AirAsia that was brokered by Khazanah, which was later unravelled following vociferous complaints from lawmakers, airline employees and consumers.
The deal was also ruled to be unlawful by the Malaysia Competition Commission (MYCC) last September, when it fined both airlines RM10 million each under the Competition Act 2010.
The Malay Mail... February 25, 2014
