Malaysia Airlines is letting go of 6,000 of it’s 20,000 employees, only days after admitting that almost 200 cabin crew members had quit recently. In addition to crew members leaving the airline, MAS has suffered a $97.6 million loss for the second quarter and $140.8 million loss in the first quarter following the disappearance of MH370 and crash of MH17.
In a desperate attempt to revive the airline, a major revamp of the system is completely necessary. This is especially true considering the negative connotations that seems to come along with it’s name. A quick search on Google image of the word ‘Malaysia Airlines’ yields these top suggestions: Crash, Logo, MH370 and Missing.
Malaysia Airlines Acquired By Khazanah
Malaysia Airlines will be owned completely by the Malaysian government from now on. Or more specifically, the state investment company Khazanah Nasional, which used to own 69% stake will now be taking 100% ownership by buying out other shareholders.
Khazanah’s Managing Director, Tan Sri Azman Mokhtar stated that Khazanah will be buying out the remaining equity from the shareholders at 27 sen a share. The airline will also be delisted and a new company will be established to take over the airline’s business. MAS is to be completely delisted from Bursa Malaysia by the end of this year.
Malaysia Airlines will also restructure it’s routes, which does not come as a surprise to many, considering the high numbers of empty seats on many of its planes. In fact, Malaysia Airlines has not made any annual profit since 2010. According to the MAS Recovery Plan, “it has seen RM8.4 billion in cumulative net losses from 2001 to June 2013.”
In addition, Khazanah is investing RM6 billion into the new company. Azman is hopeful for the possibility of relisting the new company in three years time. While some would question the insistence to keep MAS afloat, Prime Minister Dato’ Sri Mohd Najid bin Tun Abdul Razak shared his sentiments on the matter in the MAS Recovery Plan released on 29th August 2014.
“MAS is a part of Malaysia’s history,” Dato’ Tun Abdul Razak stated. “It is a symbol of national pride, of our ambitions and our place in the world. In short, it is more than just a company to us. As we turn out minds to celebrating our independence, I ask that each of you consider how you can support this national effort.”
MAS will be appointing a new chief executive by July 1st, 2015. Ahman Jauhari will continue to lead MAS airlines until next year while Khazanah searches for a suitable replacement, which is expected to be decided by the end of 2014.
MAS Lets Go of 6,000 Employees
Despite owning 108 aircrafts, which is only 5 more aircrafts than Singapore Airlines’ fleet, MAS also has 5,000 more employees.
It is clear that MAS has an excess in workforce and manpower which MAS is rectifying by letting go of 6000 employees. Khazanah will work to ensure the process of transfer, migration and separation of the existing employees will be conducted carefully, relocating part of the manpower into collaborative companies under Khazanah.
12Point MAS Recovery Plan
Shukor Yusof, an analyst with Malaysia-based aviation consultancy Endau Analytics shared his doubts as to whether MAS would be able to recover. “They have dug a hole big enough to swallow the entire company,” he stated.
However, we should not lose hope with MAS. As our Prime Minister had so succinctly concluded in his message, “More than an airline, MAS is a national icon; much-loved, and steeped in our history.” By 2020, Khazanah hopes to ‘dig’ MAS out of ‘the hole’ and establish the airline as a financially self-sufficient and recognized industry leader.