Ailing national carrier Malaysia Airlines must be prepared to cut costs in order to overcome the financial crisis it is facing, former managing director Abdul Aziz Rahman said yesterday.

Abdul Aziz said the airline should not spend excessively, especially in image-building, as it was already recognised internationally.

"Scrutinise and strive to cut down on the expenditure," he was quoted as saying by the official Bernama news agency.

Abdul Aziz outlined several areas of expenditure which could be reviewed, including catering and the order of six Airbus A380 superjumbo aircraft.

"The biggest mistake by the government was to sell 70 percent of the catering rights to a third party. If we do it ourself, we can control the price and the volume of food needed," he said, adding that food orders should be based on the number of passengers and not on the aircraft capacity.

On the procurement of the A380 aircraft, Abdul Aziz warned of losses if the move could not generate the anticipated revenue.

He said the carrier should postpone its planned revamp of aircraft interior decor, estimated to cost hundreds of millions of ringgit.

Malaysia Airlines is scheduled to take delivery of its first two A380s, the world's largest commercial aircraft, in July and September 2007.

Stiff competition

Abdul Aziz, who served more than 20 years with the carrier, said he felt the airline's poor financial record was not a major problem.

"This is not a big problem. It can still be rectified. But what is important is to be prudent and there must be the will to work hard."

"Currently, the competition is great, not only from low-cost-carriers but also other airlines. We must compete to attract passengers," he said.

Recent reports said the troubled carrier planned to slash the pay of top managers from next month as part of cost-cutting measures following disappointing quarterly results.

The airline has announced one of its worst-ever quarterly losses of RM280.66 million for the three months to June, after a profit of 26.58 million ringgit a year earlier.

It announced an ambitious five-year plan to boost profits by up to 1.0 billion ringgit, which included a management shake-up.