The government will hire an experienced foreign expert as a technical adviser to run the ailing national flag carrier Malaysia Airlines (MAS), Prime Minister Dr Mahathir Mohamad announced today.

The appointment of the expert will take place despite the recent appointment of two new faces to head the loss-making airline.

"We may call the expert a chief operations officer and he will be someone with the necessary technical knowledge of running an airlines company," said Mahathir to journalists after opening the International Conference on Globalisation in Kuala Lumpur.

The government on Feb 14 announced a reshuffle of the carrier's board with the appointment of Azizan Zainul Abidin, chairman of national oil company Petronas, as non-executive chairman. In addition, ex-banker and adviser to the Finance Ministry Mohamad Nor Mohamad Yusof was appointed as the managing director of MAS.

Azizan succeeded former MAS executive chairman Tajudin Ramli, who sold his controlling 29 per cent stake in the airline back to the government in December for RM1.79 billion.

The sale has been heavily criticised as a government bailout of the flamboyant businessman because the amount paid for the shares, at RM8 apiece, was at 120 percent premium to the market price.

Tajudin paid RM8.70 per share when he bought them in a privatisation exercise in 1995.

Strategic foreign partnership

Mahathir said that the foreign expert will be hired to complement the appointments of Azizan and Mohamad Nor, who have no prior technical knowledge of running an airlines company. He did not give a time frame for the appointment of the expert.

Mahathir also said that many foreign parties were still interested in acquiring a stake in MAS to become a foreign strategic partner.

"There are lots of interest and things are still at the negotiation stage," said Mahathir.

Australia's Qantas is reported to be a leading contender for the stake after Swissair is said to have dropped out from its bid.

The Malaysian government owns close to 50 per cent of MAS following the buyback of the 29.09 percent stake in the airline from Naluri Bhd, which is 47 per cent owned by Tajudin.

Debts and losses

MAS is saddled with RM9.88 billion of mostly long-term debts and is into its fourth straight year of losses.

Azizan's appointment has also prompted talk that the government will ask Petronas to provide some financial help to MAS.

Earlier this year, the government asked Petronas to consider extending MAS a 10 per cent discount on jet fuel to help it cope with high fuel prices. Petronas accounts for 28 per cent of the airline's fuel needs. Fuel costs form 16 per cent of MAS' total operating costs.