PETALING JAYA: Malaysia does not need a national airline owned by the government, says an academic, as attempts by Putrajaya to restore Malaysia Airlines to profitability appear to have hit a wall.
Nazari Ismail of Universiti Malaya said the airline should be disposed of to the highest bidder in light of the financial crunch faced by the government.
“Since it is really quite difficult to make money in this industry, better leave it to the private sector. No need for a government-owned national carrier,” the professor at UM’s Faculty of Business and Accounting told FMT.
“If no Malaysians are interested, yes, it can be sold to non-Malaysians with some strings attached, like insisting that the name Malaysia Airlines be maintained,” he added.
Since 2001, the government has spent some RM23 billion to keep the beleaguered airline going.
The last effort to revive the airline was in 2014, when its sole shareholder, national sovereign fund Khazanah Nasional Berhad, injected RM6 billion into the airline, and introduced a controversial restructuring plan that saw 6,000 losing their jobs.
Khazanah delisted Malaysia Airlines in 2014 at 27 sen per share. The same year, the company registered a loss of RM2.3 billion due to the ringgit’s weakness and higher jet fuel costs.
There have been calls for a complete shutter of the airline, but detractors argue that the move might affect tourist arrivals into the country. Proponents of the plan said the airline’s assets, such as aircraft and properties, could be used to repay debts, while its workers could be redirected to other airlines, such as Malindo Airways or AirAsia.
Khazanah’s managing director Shahril Ridza Ridzuan recently said Malaysia Airlines has a multiplier effect of eight to 10 times for each dollar spent on bringing tourists to Malaysia.
There have also been suggestions to hive off one of its subsidiaries to raise cash.
Malaysia Airlines’ parent company, Malaysia Aviation Group Berhad, has other subsidiaries such as Firefly, MASwings, MAB Kargo, AeroDarat Services, MAB Leasing, MAB Pesawat, MAB Academy and its maintenance, repair and overhaul (MRO) unit.
Khazanah, in its 2018 annual review, said that half of its total impairment cost of RM7.3 billion in 2018 was due to the carrier.
The national carrier is expected to lose some RM900 million for 2018.
It has been struggling for a long time to stay afloat and, without government intervention, it should have been “grounded” a long time ago.
The clock is ticking and as the debate continues, the national carrier continues to bleed. Recently, Prime Minister Dr Mahathir Mohamad said the government had not received any viable proposal for it to consider how to handle the troubled carrier.