Friday, August 16, 2013

MAS sale a hot conversational topic

MAS sale a hot conversational topic

FRIDAY REFLECTIONS - BY B.K. SIDHU

Will a straight-forward sale solve MAS problems?

THE question of whether Malaysia Airlines (MAS) is up for sale is clearly the topic of the day, although the fact remains that hardly anyone knows its answer at this juncture.

Developments are taking place behind closed doors it seems.


The rumour mill on MAS is on overdrive and interestingly, it is happening at a time that is close to the Umno general assembly.

Parties interested in MAS seem to be pushing for a sale to happen. They are pushing the theory that MAS is in dire straits yet again and only a sale to a private party can salvage the national carrier.

So when Minister in the Prime Minister’s Department Datuk Seri Idris Jala said at a forum on Tuesday that the Government should get out of the aviation sector, it became a hot topic of debate at lunches to coffee tables.

Surprisingly ten hours after making that statement, Idris sought to clarify his stand, holding the view that MAS was not in fact for sale.

What was it that inspired Idris to make that clarification? Was politics at play?

To be fair to Idris, he was replying to a question during the forum. And in fact, his view that the Government ought to exit the airlines business is a view shared by many experts.

Rather that it be continuously funded by tax payers money, a private entity should take over its running to ensure that strict financial discipline be instilled to make this airline work. Such turnaround stories have happened with other national carriers.

But MAS’ story is more complicated and is a straight forward sale really the best solution at this point in its evolution?

While MAS has been in the doldrums for many years, there were years when it came out of the woods. Often though, it has slipped back into financial troubles and no one denies that there are big operational and structural issues that it needs to fix.

There is a school of thought that reckons that the current team – Tan Sri Md Nor Yusof, the chairman, MAS’ board of directors and its group CEO Ahmad Jauhari Yahya – should be given some time to show their results before any decision is made. This team has come on board MAS only about two years ago.

Meanwhile, the rumour mill isn’t stopping. One idea being floated around, as a potential strategy of MAS, is to split the operations of the company into two – one handling domestic routes and the other, international. The idea of splitting up the company this way isn’t new. It was first proposed during the comprehensive collaboration framework (CCF) plan back in August 2011. The CCF plan was essentially to make both AirAsia and MAS collaborate and not fight each other.

The plan to split the company, however, was then shot down because it was seen as not workable, considering that MAS’ value proposition is to serve as an integrated airline that provides seamless connectivity locally and abroad.

The MAS-for-sale talk is also inspiring some personnel from within the group to eye the top post at the airline, rumour has it. The story goes that some of these candidates are being backed by potential buyers of the airline.

Even the MAS Employees Union (Maseu) has its own preferred candidates and are seeking an appointment with the Prime Minister for a management change at MAS. Recall that Maseu previously had been instrumental in scuttling a share swap agreement two years ago that had been done with Tan Sri Tony Fernandes of AirAsia.

What MAS really needs to do now is to show the profit numbers. That is its priority, nothing else matters and time is not on its side.

Or else politics may just win again though the GE13 is long gone and done with.

Business editor (news) B.K. SIDHU feels MAS never fails to excite the market over and over again.


Source/Extract/Excerpts/来源/转贴/摘录: thestar.com.my
Publish date: 16/08/13

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