MAS: We treat you like gold

MAS is a national icon but at yesterday’s tabling of the RM6 billion restructuring plan by Khazanah Nasional's managing director, Tan Sri Azman Mokhtar made it unequivocal that the ‘investment’ would be on a staggered basis and on compliance to precedent conditions.

The investment comes with conditions and is not a carte blanche for MAS.

He outlined 12 points which were the overview to the restructuring plan. In a media briefing which was well attended by local and foreign media and a question and answer session that almost lasted an hour, Azman did well to remove the doubts of the naysayers .

But the question remains,will the restructuring plan work?

In the absence of a crystal ball, the intellectual prowess at Khazanah can be counted on as they had delivered on many occasions but the inherent toughness of the aviation industry cannot be underplayed.

Khazanah will spend RM1.38 billion to take MAS private, RM1.62 billion for transition from ‘Old Co’ to ‘New Co’ and RM3 billion for capital.

The government has pumped in RM7 billion since the first restructuring of MAS in 2001 and that is basically ‘sunk cost’. It is not in a position to lose another RM6 billion as it strives hard to reduce its deficit.

MAS had been mismanaged in the past especially when the government bought back MAS shares from its owner, Tan Sri Tajuddin Ramli who was chairman of MAS from 1994 to 2001 at RM8 per share. It's pre-suspension price yesterday was 25 sen. The cumulative losses at the airline during that period was RM8 billion.

However, one stark aspect of the plan announced by Azman was the decision to cut the headcount at MAS.

This had not been done before as the mighty unions were beyond reproach and it was a known fact that MAS was over staffed compared to other airlines its size. Its revenue per employee was much lower.

Tan Sri Azman Mokhtar

The plan also calls for all parties to close ranks and work together to enable the permanent reconstruction of our national icon, says Azman at the press conference on Friday. - Photo by Astro AWANI/Shahir Omar

This was perceived as a politically sensitive move and although MAS was a public listed company, its reticence to address the issue of bloated staff previously simply meant that there were issues with the financial stewardship of the company.

Enhancing Industrial relations was outlined as one of the 12 points in the restructuring plan. This is a move in the right direction.

Many fund managers are averse to investing in aviation stocks because there are too many factors beyond control that affect the industry. The twin tragedies of MH370 and MH17 come to mind.

Azman did not elaborate on the nitty-gritty of the restructuring plan such as issues of route rationalization- another critical area of importance but had stated that MAS sub divisions such as its MRO (maintenance, repair, overhaul) unit would not be separated from the company for now.

Azman also said that the MAS’ name will remain.

Khazanah has a mammoth task of resuscitating MAS …Tough but not impossible. One thing for sure , we Malaysians treat MAS like gold, a precious asset, a national icon.