Discard the deadwood and privatise MAS before it bleeds to death
My article was earlier published in TheAntDaily.com on 24/6/2014
Hasn’t the BN federal government realised what happened to the country’s national carrier Malaysia Airlines (MAS) after all these years?
MAS has been bleeding the past three years. It suffered a loss of RM2.52 billion in 2011, followed by losses of RM433 million in 2012 and RM1.2 billion in 2013. For the first quarter of 2014, MAS recorded a net loss of RM443.4 million and no improvements are expected in the later months or even in the next two years.
Its share had also plunged to all-time lows.
As we all know, MAS is a government-linked company (GLC) with Khazanah Nasional as the largest shareholder and being a GLC, MAS had proven that it cannot perform at all, as evident from its continuous losses.
Khazanah itself has no expertise in running an airline. Furthermore, being the government’s investment arm, Khazanah already has too many GLCs under its care and it couldn’t give its full attention just to MAS.
As such, Khazanah and the government should rethink its position and major shareholding in MAS to consider letting go all its shares and allow private investors to take over the bleeding carrier. It is clear that MAS is technically a bankrupt entity by now which is still looking for someone or trying to beg the government for cash to fill its empty bag.
Under the patronage of the government all this while, MAS is being managed like any other government agencies. In other words, MAS is not managed as a business entity should and at times it seemed more like a welfare department.
In the management and business point of view, this airline has gone overboard in many aspects of its operations. MAS has about 100 aircraft (including the missing MH370) and more than 22,000 employees. And guess what? The salaries and perks in MAS are also so much higher than those of AirAsia, Malindo and Firefly.
The tragic part here is that MAS has the greatest disadvantage of having several in-house unions which can hold the entire company to ransom. These unions have been making too many demands, including for better benefits, despite knowing that MAS is not in a position to entertain their requests. On many occasions, these unions had been a stumbling block to efforts to turn around the ailing carrier.
MAS is overstaffed. Many of its employees are redundant and were hired at the pleasure of the ruling party’s leaders and their cronies. Not to forget that a MAS human resource executive, who is also an Umno Youth leader, took time off during office hours to join a group of trespassers at the Penang State Legislative Assembly building recently.
We wonder how many more Umno leaders under the MAS payroll are carrying out political work during office hours. How much time off has been granted to these redundant and unproductive employees?
This is one of the few examples of how MAS would continue to bleed if all these Umno-linked employees are allowed to continue “working” with the company. What have they contributed and what are their roles in the company?
Nothing but loss of workman hours and non-value added capital due to the continuous absence of these so-called employees during office hours.
As mentioned earlier, MAS has been run like a welfare department by keeping unproductive but politically linked employees who indulge in non-office work on office time.
As long as these negative elements are not rid of, Khazanah would not be successful no matter how or what it does to try revive MAS for the next six to 12 months.
The culture of MAS of being overly dependent on government funding must stop as soon as possible due to the fact that Khazanah has already injected more than RM5 billion of taxpayers’ money and yet the company has failed miserably. MAS’ accumulated debt has now come to about RM8 billion due to the high operational costs it has to endure.
The only and last option for MAS to rebound is to allow this ageing airline to undergo the fullest privatisation, to have its entire management and operations revamped from top right down to the bottom no matter what it takes.
Well, the ball is in the government’s court now. Let’s see if it is willing to forgo the race card to adopt a performance-driven plan for MAS’ survival.
Hasn’t the BN federal government realised what happened to the country’s national carrier Malaysia Airlines (MAS) after all these years?
MAS has been bleeding the past three years. It suffered a loss of RM2.52 billion in 2011, followed by losses of RM433 million in 2012 and RM1.2 billion in 2013. For the first quarter of 2014, MAS recorded a net loss of RM443.4 million and no improvements are expected in the later months or even in the next two years.
Its share had also plunged to all-time lows.
As we all know, MAS is a government-linked company (GLC) with Khazanah Nasional as the largest shareholder and being a GLC, MAS had proven that it cannot perform at all, as evident from its continuous losses.
Khazanah itself has no expertise in running an airline. Furthermore, being the government’s investment arm, Khazanah already has too many GLCs under its care and it couldn’t give its full attention just to MAS.
As such, Khazanah and the government should rethink its position and major shareholding in MAS to consider letting go all its shares and allow private investors to take over the bleeding carrier. It is clear that MAS is technically a bankrupt entity by now which is still looking for someone or trying to beg the government for cash to fill its empty bag.
Under the patronage of the government all this while, MAS is being managed like any other government agencies. In other words, MAS is not managed as a business entity should and at times it seemed more like a welfare department.
In the management and business point of view, this airline has gone overboard in many aspects of its operations. MAS has about 100 aircraft (including the missing MH370) and more than 22,000 employees. And guess what? The salaries and perks in MAS are also so much higher than those of AirAsia, Malindo and Firefly.
The tragic part here is that MAS has the greatest disadvantage of having several in-house unions which can hold the entire company to ransom. These unions have been making too many demands, including for better benefits, despite knowing that MAS is not in a position to entertain their requests. On many occasions, these unions had been a stumbling block to efforts to turn around the ailing carrier.
MAS is overstaffed. Many of its employees are redundant and were hired at the pleasure of the ruling party’s leaders and their cronies. Not to forget that a MAS human resource executive, who is also an Umno Youth leader, took time off during office hours to join a group of trespassers at the Penang State Legislative Assembly building recently.
We wonder how many more Umno leaders under the MAS payroll are carrying out political work during office hours. How much time off has been granted to these redundant and unproductive employees?
This is one of the few examples of how MAS would continue to bleed if all these Umno-linked employees are allowed to continue “working” with the company. What have they contributed and what are their roles in the company?
Nothing but loss of workman hours and non-value added capital due to the continuous absence of these so-called employees during office hours.
As mentioned earlier, MAS has been run like a welfare department by keeping unproductive but politically linked employees who indulge in non-office work on office time.
As long as these negative elements are not rid of, Khazanah would not be successful no matter how or what it does to try revive MAS for the next six to 12 months.
The culture of MAS of being overly dependent on government funding must stop as soon as possible due to the fact that Khazanah has already injected more than RM5 billion of taxpayers’ money and yet the company has failed miserably. MAS’ accumulated debt has now come to about RM8 billion due to the high operational costs it has to endure.
The only and last option for MAS to rebound is to allow this ageing airline to undergo the fullest privatisation, to have its entire management and operations revamped from top right down to the bottom no matter what it takes.
Well, the ball is in the government’s court now. Let’s see if it is willing to forgo the race card to adopt a performance-driven plan for MAS’ survival.
