The stark contrast between a badly-run company and a well-managed company is exemplified by what is happening in MAS and SIA.

MAS has just chalked up the biggest loss in its sorry history - RM1.3 billion - for the year ended March 2001. This is the third consecutive year of losses for MAS. And its new managing director, Mohamed Nor Yusof, is predicting another loss (the fourth straight year of losses) of RM1.2 billion for the current financial year ending March 2002. A return to profit is only expected in the financial year ending March 2004.

MAS cannot afford, at this time, to either expand its fleet or upgrade its inflight services like the more financially well-off airlines are doing. The flawed implementation strategy behind the new KL International Airport is not helping.

Meanwhile, SIA goes from strength to strength. It has been consistently profitable. It is sitting on a big pile of cash. Bankers rate it as eminently creditworthy. It is one of the most admired and well-regarded airlines in the world, consistently topping any survey of the world's best airlines. Indeed, there is now speculation that it may be poised to enter the Australian domestic market by taking over Ansett in return for selling its (SIA's) 25 percent stake in Air New Zealand to Qantas.

How did MAS dig itself into such a big hole? Regardless of what the government says, it is not due to a hostile external environment. That argument can be demolished easily as the better-managed airlines in the region - SIA, Cathay Pacific and Qantas - have all made profits even during the recent period of economic and financial turbulence.

The answer is very simply in the quality of management, especially top management. And this is where MAS has fallen woefully short. Awarding the stewardship of an airline on the basis of 'know who' instead of 'know how' is a sure recipe for disaster.

Re-nationalising MAS, as the government has done, is not going to stop the airline bleeding and running up losses. And in spite of the new MD's brave words, there is a lot of hard work to be done if MAS is to be turned around and made profitable. And whether the government is willing to give him a free hand to do what needs to be done (including a substantial laying off of staff) remains to be seen.

In a country where politics and domestic considerations continually impinge on sound business decisions, one is not too hopeful.