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SEPTEMBER 2014

Week 37

Airline News

Commission to investigate MAS losses likely, Jauhari stays

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September 9th 2014

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Malaysia’s opposition Pan-Malaysian Islamic Party, or PAS in short, has called on the government to set up a Royal Commission of Inquiry (RCI) to investigate Malaysia Airline System Bhd.’s losses over the years, says Malaysian news daily The Rakyat Post. Read More »

“It’s not that we want to see MAS bankrupt, or that it need not be revived. We as Malaysians know that it needs to be salvaged because it is our national treasure. But we must question those who have brought down MAS over the last 10 to 15 years to its current state,” PAS information chief Omar said without naming anyone in particular.

Khazanah Nasional, the government investment arm that currently holds a 70% stake in MAS, last week announced a rescue plan for MAS titled “Rebuilding A National Icon”.  

Khazanah said it would spend 6 billion ringgit (US$1.9 billion) to revive the airline, including 1.4 billion ringgit to take the carrier private by year-end, 1.6 billion ringgit for 6,000 layoffs and other restructuring costs and 3 billion ringgit to retire debt and provide capital.

The plan aims at returning MAS to profitability within three years whilst reducing frequency on underperforming long-haul routes, or cutting them altogether.

A Centre for Aviation (CAPA) analysis of MAS’ restructuring plan also suggests the airline should be looking at forging closer relationships with its oneworld alliance partners to offset the potential loss of ASKs to Europe and the Middle East, or, in an independent scenario, look for an airline equity investor outside the oneworld alliance. Abu Dhabi’s Etihad Airways has been mentioned in this context.

In other news, MAS chief executive officer Ahmad Jauhari Yahya will stay at the airline until next July “to ensure a proper handover,” a source at MAS told This Week in Asia-Pacific Aviation. His contract was set to expire later this month.

Meanwhile, MAS drew heavy criticism last week when it launched a marketing campaign dubbed “My Ultimate Bucket List” -- which as TIME points out, was not the best choice of words since a bucket list is made up of things one wants to do, see or accomplish before dying.

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