It’s time for MAS to earn its keep

comments     Yoursay     Published     Updated

YOURSAY ‘Nothing would please me more than to see it rise from the tragedy.’

 

Hisham: No gov't help for financially ailing MAS

TC Chan: MAS is in an unenviable position. Because it is a GLC (government-linked company), it cannot operate like a normal corporation where profits matter.

 

It has to put up with government interference is almost all aspects of its operations, from the routes it has to fly to entrenched unions which played BN against Pakatan Rakyat over the deal it struck with AirAsia.

 

And it cannot really choose the best man for the job in top management. The government has the final word on this.

 

So if the government says it is not going to help MAS now, it must give up its golden share and reduce its shareholding or at least allow MAS space to operate like any other company.

 

You cannot have your cake and eat it. I say all these because I have a soft spot for MAS. Nothing would please me more than to see it rise from the tragedy. It may be able to do this if the government stops interfering.

 

Zen: The real financial crunch for MAS has yet to come. With hundreds of millions ringgit of losses incurred every three months (RM442 million loss for Jan-March 2014) MAS will be financially insolvent soon.

 

When the paid-up capital is dried up and operations began to cease, there will be defaults in loans payment to suppliers and financial institutions. Legal actions will be instituted against MAS and its guarantor, the government of Malaysia.

 

Will the government default or honour its sovereign obligation? If it honours its obligation, then it is the same as bailing out MAS.

 

The second test is what if MAS can no longer pay the salaries of its 20,000 strong workforce? Will the government just ignore its humanitarian role? Ultimately the government will again bail out MAS, this time on helping the workers.

 

On the financial front, a new CEO will try to convince the government that MAS can be saved with another injection of capital based on a new business turnaround model...

 

Ferdtan: MAS must be privatised and sold by open tender. The best and higher bidder is to be selected.

 

The whole process must be transparent. No government guarantees, grants or loans from the government should be given. They must come up with their own financing.

 

To maintain a semblance of control over the national airline, the government must hold a golden share in the corporation. This is not to control the operation of the airline.

 

To keep meddling politicians from interfering, the agreement in the golden share arrangement must be spelt out clearly and not too restrictive. It should only be for the purpose of national security and interest.

 

It is time for MAS to earn its keep. No more charity from Malaysians. We are fed up. MAS should shape up or ship out.

 

Justice Pao: Based on the projected losses of at least RM1.5 billion that MAS will lose in a year and the highly likely bail out by the government, this will cost about half of the money collected from the implementation of GST (Goods and Services Tax).

 

Together with the billions lost in leakages according to the Auditor-General’s Reports, all this money is definitely more than the amount collected from GST. So why do we need GST?

 

Multi Racial: The government should not use taxpayers or Petronas money to help any ailing company.                               

 

MAS did not do well because they company was not well run. It is for the shareholders to decide the fate of the company. And it is for the authorities to decide the fate of MAS listing.

 

The same goes for Proton and all other GLCs. Let the fittest survive and the weak go bankrupt.

 

Fernz: State-owned investment fund Khazanah Nasional owns MAS. The government will pump money from Petronas into Khazanah and Khazanah, in turn, will pump money into MAS.

 

Sin Lee Huang: Thank you, acting Transport Minister Hishammuddin Hussein, I believe you (I’m being sarcastic here).

 

In this case, I will say some help is warranted. This is an extraordinary circumstance and if we can, just like we should do for any other companies in the same situation, give MAS just enough to make sure it will not tank just because of the MH370 incident.

 

Awakened: MAS should just follow what JAL (Japan Airlines) did in 2010. JAL suffered great losses and was on the verge of bankruptcy when the Japanese government said enough was enough, no more money for JAL.

 

JAL subsequently filed for bankruptcy protection in the court by providing a restructuring plan. The court approved the plan.

 

With the new plan, JAL laid off 16,000 employees, cut all the unprofitable flights, sold the excess planes, etc. With a new CEO and management staff, and with a leaner and more efficient team of workers, JAL returned to profitability in 2013.

 

MAS should emulate what JAL did and probably MAS can still survive without the government's continued support.

With the restructuring, MAS will be delisted and then relisted with new private investors who has final say on the management of the airlines. The new investors could be AirAsia, DRB-Hicom, SIA (Singapore Airlines), Malindo or local bankers.

 

Commentable: Will the government do an about-turn and come up with a last-minute rescue deal, all under the radar of course, to pull MAS out of troubled waters?

 

Nothing is surprising any more, but we just have to wait and see.


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