Northstar

www.travelweekly-asia.com 14 | ITB ASIA Official Dailies While all these woes were not enough to bring down MAS or even cause it to falter in its operations, two tragic incidents within a space of five months this year however did - the loss of two Boeing B777-200ER aircraft together with over 500 lives. The first – Flight MH370 with 12 Malaysian crew members and 227 passengers from 15 nations on board - mysteriously disappeared from the radar on March 8 while on a routine flight from Kuala Lumpur to Beijing, China. At the time of MH370's disappearance, and the presumption of the loss of all lives on-board, it would have been the deadliest aviation incident in the history of Malaysia Airlines and the deadliest involving a Boeing 777. However, this "record" was not to be with the crash of another MAS 777, Flight MH 17, 131 days later on July 17. The aircraft was enroute from Amsterdam to Kuala Lumpur when it was shot down over Ukraine, killing all 283 passengers and 15 crew on board. Malaysia once again stood in the eyes of the world. This would be the death knell for Malaysia Airlines, once again, declared the same people who called for it to be rebuilt. Some analysts suggested that the only way out for the airline was "constructive destruction", which means demolishing the entire company and rebuilding it from the ground up. Yet others called for the airline to be privatised or even be sold. Through the two tragedies the MAS management and its staff had to face anger, criticisms, and calls for the senior staff to resign. Getting the brunt of the resignation calls was MAS managing director and CEO, Ahmad Jauhari Yahya. He, however, has remained steadfast throughout the ordeal. However, on August 29 MAS revealed its financial results for the second quarter ended June 30, 2014, with a hefty net loss of RM307.04 million, compared with a net loss of RM175.9M a year ago. SAVING AN AIRLINE: THE RM6BN PLAN TO RESUSCITATE MALAYSIA AIRLINES By Corinne Wan Azman said 6,000 staff would be laid off under a voluntary separation scheme (VSS), while about 3,500 would be offered employment in other companies under Khazanah Nasional's umbrella. "The combination of measures will enable our national airline to be revived. Success is by no means guaranteed - while it is imperative that MAS as a critical enabler in national development is revived, public accountability for the use of the funds means that it cannot be renewed at any cost," he added. Ahmad Jauhari's contract has also been extended for another year, until September 19, 2015, to manage the airline's transition to NewCo. The AirAsia group has offered to absorb some of those who will be axed in the MAS revamp. Group CEO Tony Fernandes said both AirAsia and AirAsia X are growing and require more staff, pointing out that almost 50% of the group's staff are former MAS employees. Despite Khazanah's ambitious reforms for Malaysia Airlines certain quarters feel that more needs to be done. This view was expressed in a Straits Times Asia Report, which stated, "There is a sense of deja vu when it was announced that a new holding company would be set up to house the delisted Malaysia Airlines. "A similar plan had been introduced back in 2002 when a Khazanah-owned holding company had been set up, Penerbangan Malaysia Berhad (PMB). RM5bn of MAS assets and RM7bn of debt had been transferred to PMB, which then leased aircraft back to MAS." The report said initially, the plan appeared to work but it all went downhill. "Since the government took over MAS in 2001, the airline has bled RM8.4bn, including RM2.8bn in losses by PMB." This will be the fourth bailout for the 76-year-old MAS since 2007. All eyes are on how the privatised and much leaner NewCo will fare, and whether it will keep MAS flying again… in the black this time. The airline said the almost doubling of losses compared to the previous year was impacted by twin tragedies of MH370 and MH17. Coupled with the reported loss of about RM3m a day, the bleeding was just too heavy for the airline to carry on operating in a viable way. The following day, on August 29, sovereign wealth fund Khazanah Nasional (also the investment arm of the Malaysian government) announced a 12-point plan to bring the airline back to profitability within three years. While the restructuring is not a "constructive destruction", the RM16 Bn (US$1.9bn) revamp plan will see the axing of 6,000 jobs (30% of the 20,000 workforce) and the creation of a new company. Khazanah Nasional managing director, Tan Sri Azman Mokhtar, who revealed the restructure plan, said the airline, apart from undergoing a comprehensive overhaul, would also be privatised. Under the plan, titled "Rebuilding A National Icon – The MAS Recovery Plan", a new company (NewCo) will be formed by July 2015 when it completes its delisting to house the new MAS, migration of the right-sized workforce and work practices, as well as contracts, into NewCo. "The plan, worked on for over six months, is incumbent upon Khazanah, which now holds 69.3% of MAS, owning 100% of the airline following its move to buy the remaining equity from minority shareholders at 27 cents a share, which is deemed as reasonable in the market," said Azman. (The process of buying the shares from the shareholders is ongoing). The aim is to bring the airline to profitability within three years of its delisting, expected by the end of the year. Plans are to re-list the carrier in three to five years time. MAS will also slash unprofitable routes and concentrate on regional routes, and shift its headquarters from Subang to the KL International Airport. Details of the route rationalisation have not been detailed. Much has been written about Malaysia's national carrier, Malaysia Airlines (MAS), in the last year. It's losing up to RM3m a day, we're told. Some are calling for the airline to be sold in view of its losses, others want to privatise it, or retrench the staff… PHOTO COURTESY OF AIRBUS. IMAGE BY S. RAMADIER. MAS cabin crew filming a demonstration flight of the airline's A380. aviation

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