MAS restructuring plan not complete without operations and business overhaul

PAC Chairman Datuk Nur Jazlan Mohamed said the plan announced yesterday only involved a financial restructuring.

"It is a big task to turn MAS around because of the current market situation and competition," he said referring to the open sky policy where premium airlines can move in and out freely.

This has resulted in excess seat capacity in the region and Khazanah has not disclosed details how it would overcome the open sky policy which would impact MAS' international sectors.

He asked how MAS was going to garner back the domestic sector which was currently dominated by low-cost carriers.

"MAS needs to have a domestic sector network which will set the pace for its international routes.

Restructuring cannot only focus on financials but must move hand-in-hand with operations and business," he told a press conference after opening the UMNO Pulai Division meeting here today.

Khazanah Nasional Bhd has unveiled a RM6 billion recovery plan for Malaysia Airlines (MAS) which will see the ailing national carrier inject greater efficiency by cutting its staff size comprising almost 20,000 by 30 percent and refocusing on profitable regional routes rather than loss-making long-haul destinations. Prime Minister Datuk Seri Najib Tun Razak said the RM6 billion to be injected into Malaysia Airlines (MAS) is not a bailout but an investment by Khazanah Nasional Bhd because it must be recovered.

He said the full recovery of the national carrier may take longer than three years but was hopeful a positive turnaround would be seen within three years.

Nur Jazlan said the national aviation policy must be looked at holistically because, while it helps to strengthen MAS, it should not jeopardise other airline companies operating in the country.

"If we use this law to turn around the national carrier especially in its ailing condition without proper planning, it will jeopardise other airlines," he added.

Nur Jazlan said MAS' problem was not that of "branding" as a result of the MH370 and MH17 tragedies but due to massive losses in the last.

"There are definitely inherent problems with MAS' business and operations modules. MAS needs to place less effective and competitive business components like increasing staff efficiency, renegotiating supply contracts and overcoming union problems," he added.