Malaysia Airlines
Malaysia Airlines

wpid-Report20Malaysia20Airlines20flight20crashes20in20Ukraine.jpgThe majority shareholder of struggling Malaysia Airlines said Friday the ailing national carrier is on course to become fully state-owned, as part of a “complete overhaul” of the company that was hit by two major air disasters within five months.

Khazanah Nasional, Malaysia’s state investment fund, owns 69 per cent of the company. It is offering other shareholders 0.27 ringgit (0.08 US dollars) per share for complete control of the company.

Trading of MAS was suspended Friday on the local stock exchange.

“The proposed restructuring will critically require all parties to work closely together to undertake what will be a complete overhaul of the national carrier on all relevant aspects,” a statement from Khazanah said.

The fund said the restructuring would take six to 12 months, with a detailed plan expected by the end August.

Having all the shares held by one party would make it easier for the company to carry out wide-reaching reforms quickly and effectively

But Shukor Yusof, an aviation analyst with Malaysia-based Endau Analytics, believed Khazanah is making a “regressive move” by taking the airline fully into government hands.

He said Khazanah has not been able to turn around the beleaguered company in the last decade and is sceptical it would succeed now unless “very drastic and radical” measures are taken, such as Swiss Air’s shutdown and grounding in 2001.

MAS is beset with legacy issues, government interference, a bloated staff of nearly 20,000 and shady contracts that benefit cronies.

The company has undergone a number of restructurings before. The latest was unveiled in 2011, which aimed to make Malaysia Airlines profitable by 2013 through route rationalization, job cuts and retiring its old fleet with newer and more fuel efficient planes.

Instead the company announced a net loss of 1.174 billion ringgit (364 million dollars) for 2013.

The financial turmoil was compounded by the two aviation catastrophes is suffered this year. Flight MH370 went missing in March after leaving Kuala Lumpur and flight MH17 was shot down over Ukraine last month.

MAS Employees Union Executive Secretary Mohamad Jabarullah Abdul Kadir said he did not have high expectations for Khazanah’s plan.

“Their last few business plans have all failed,” he told dpa.

He insisted what MAS needs is a change in top management. “There must be new blood with industry background,” he said, adding that he believed job cuts should not be part of the solution.

Prime Minister Najib Abdul Razak promised there would be “wholesale change” at MAS.

“We believe our national carrier must be renewed. This means wholesale change, to deliver a wholly different outcome. Only through a complete overhaul of the company can we deliver a genuinely strong and sustainable national carrier. Piecemeal changes will not work,” he said.

Malaysia Airlines said it would table Khazanah’s proposal to its shareholders at an extraordinary general meeting to be scheduled later.

“Malaysia Airlines will continue to operate all our current flights, schedules and reservations. Our focus remains on delivering the world class customer service that we are known for around the world,” it said.
GNA

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