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Learn from AirAsia, Dr M tells MAS

March 3, 2012

Now is the best chance to see why the national carrier had plunged into a deep fiscal crisis while the budget airline is making profit, says the former premier.

KUALA LUMPUR: Dr Mahathir Mohamad has urged Malaysia Airlines (MAS) to study AirAsia’s cost-cutting measures and management structure for it to return to the black.

Now was the best chance to understudy and see why the national carrier had plunged into a deep fiscal crisis while the budget airline was making profits, the former prime minister told Bernama.

The swap deal between Khazanah Nasional Bhd and key shareholder of AirAsia should tie them together, he said.

In August last year, MAS and AirAsia entered into a collaboration agreement that was strengthened by Tune Air Sdn Bhd and Khazanah Nasional – the major shareholders of AirAsia and MAS respectively – swapping their shares.

This resulted in Tune Air holding 20.5 percent equity interest in MAS and Khazanah owning 10.0 percent of AirAsia, and also Tune Air founder and co-founder Tony Fernandes and Kamarudin Meranun joining MAS’ board.

“Given that both the airlines operate from the same country, there is no reason for MAS to fail. They have to team up with AirAsia,” Mahathir said.

“AirAsia is making plenty of money. They are making profit even though their fares are very low.

“So there is something MAS can learn from AirAsia in terms of management, cutting down costs and therefore, making profit,” he said.

MAS posted RM2.52 billion net loss for its financial year ended Dec 31, 2011 – the biggest-ever in its corporate history, on the back of RM13.9 billion revenue.

AirAsia, meanwhile, reported a net profit of RM564.1 million on the back of RM4.47 billion record revenue.

Asked whether Khazanah Nasional should divest its shares in MAS if the crisis continues, Mahathir said: “Well, I would not be able to say on that.”

-Bernama

Also read:

High time for a RCI on Malaysia Airlines


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