Unions are major hurdles in MAS' recovery, says think-tank

The major hurdles for the ailing Malaysia Airlines (MAS) to return to profitability are its employees' unions, a prominent think-tank said.

Chief executive officer of the Institute for Democracy and Economic Affairs (IDEAS) Wan Saiful Wan Jan said every time efforts were made to reform or restructure the airline towards profitability, the unions would come all out against many of the proposals.

"So I think what we need to do to turn MAS into a profitable company is by taming down the influence of the unions. They are a little bit too influential, too vocal, too powerful. Yes, respect employees' rights as it is absolutely imperative that their rights be respected.

"But the powers of the unions are sometimes not really in line with the interest of the company itself. It is ironic that the staff size in MAS is too big when the company itself is loss-making. Usually, a company will aim at cutting costs when it is not doing well," he told Bernama.

Wan Saiful also criticised the unions for being almost always resistant to change, adding that they should accept change in order for the airline to be saved.

He said for the whole company to be saved, there had to be some difficult decisions made and if the unions kept resisting, nothing was going to work.

Asked what he thought was the crux of MAS's problems, Wan Saiful said the national carrier was way up there in terms of providing superior service even if compared with the likes of Emirates or American Airlines but it was unable to compete in terms of price.

Citing an example, he said for the 45-minute flight to Penang from here, passengers would fly the cheaper option than MAS because it did not matter to them if they were served a sandwich when they could survive without even drinking water on board. Similarly, there is a big difference of a few thousand ringgit extra for passengers flying MAS to Dubai from here compared to Emirates.

"So there is severe cost, there is significant cost competition happening and MAS really has to catch up with that. I think this is the biggest problem, they have to significantly cut costs but for some reason this is not happening," said Wan Saiful.

"Also one of the biggest expenditures has to be on the staff cost and with such strong unions resisting that change, it is just not going to happen."

Wan Saiful also called for the link between MAS as a company or government-linked company (GLC) to be severed.

"It has to be cut off. When you cut that off, then MAS has to run as a company by itself. It cannot be dependent on bailout anymore. If you have to close down, you have to close down and then only some sense of reality should sink into the employees and the unions that you cannot play the political game anymore because you are now just another company and there is no one to protect you anymore.

"If you cut that link, I think there will be some significant changes," he said.

He said for as long as MAS remained a GLC, its employees would always feel that they were safe because whatever happened, the government would always bail them out.

Wan Saiful said the issue in MAS was no longer about what business model to adopt but whether or not there was political will to change.

"And just like everything else in Malaysia, when it comes to political will to take the hard decisions, it doesn't happen," he said.