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MAS: Options and options... Posted: 10 Jun 2014 09:10 AM PDT Why do we need six to 12 months to decide on whether the government will continue babysitting national carrier Malaysia Airlines? Are we hoping for MAS to walk again or let it crawl before declaring it bankrupt or selling it off? MAS is already in trouble. Already facing the burden of having to lose millions in legal suit over MH370, I don't think it can offer any returns to the government in the few years to come, let alone keeps shareholders on a positive mood. Careful analysis on the airline must be carried out not only by government's investment arm Khazanah Holdings but professional aviation experts on the future of MAS. Should the government decides on injecting more fund (already amounting to RM5 billion), it must be done on pussyfoot as not to adversely affect Khazanah's investment portfolio. There are still rooms to revive and salvage the company. If we need to sell it off, preference must be given to local businessman. Unless it already reached the state of indefensible! The Public Accounts Committee (PAC) also wants Putrajaya to decide whether it is going to help ailing Malaysia Airlines, now plagued with the mystery of missing flight MH370, or let it go. PAC chairman Datuk Nur Jazlan Mohamed said Putrajaya has been helping MAS out for far too long even before the "open sky" policy, which has since resulted in increased competition due to the emergence of low-cost carriers. "If you ask us, surely we have an opinion, why use public funds to revive MAS without any positive outcome. "After so many years of helping MAS, and despite denials that the company does not get any government aid, Khazanah is the investor and the money comes from the government. Yesterday, Khazanah Nasional Bhd said it will announce a plan for Malaysia Airlines Bhd in six to 12 months to hopefully be able to steer the national carrier out of its problems. Khazanah managing director Azman Mokhtar said in doing so, three things needs to be in place. "One, we must make sure internally MAS as a company needs to up its productivity. Secondly, MAS as a national carrier needs to be clear about what kind of national carrier we want considering all circumstances including competitiveness. And the third is that the leadership to do this is very challenging," he said. Speaking to reporters at the Invest Malaysia 2014, Azman said it was very challenging for the MAS leadership and "we appreciate that CEO Ahmad Jauhari Yahaya and his team is working very hard". "Over the immediate term I believe there is enough headroom in terms of finances but over the medium to longer term this thing needs to be solved in a sustainable manner," he added. Khazanah, which is undertaking a study that included consulting its stakeholders, will present its decision to the government over the immediate term. In September last year, Nur Jazlan also reprimanded Khazanah Nasional for its role in the Malaysian Airlines-AirAsia share swap deal which resulted in both carriers being fined RM10 million each by the Malaysian Competition Commission (MyCC). He said that Khazanah and other government-linked companies (GLCs) should not rely solely on consultants for advise. He said the consultants were only motivated by profit and had at times overlooked the laws governing a transaction. The state asset manager holds a 69 per cent stake in Malaysia Airlines (MAS). In 2011, MAS and low-cost carrier AirAsia entered into a share swap deal which saw cross holdings by both entities. MAS would hold a 10 per cent stake in AirAsia while AirAsia's stake in MAS would be 20.5 per cent. The deal was later rescinded after the MAS Employees Union (MASEU) opposed the deal claiming it would result in job losses at MAS. The possible privatisation of MAS would also cost Khazanah, its principal shareholder about RM1.18 billion, assuming a 10 per cent premium on its current share price. While further assuming that the profitable businesses are spun-off and separately listed with Khazanah ceeding a 30 per cent stake, Khazanah would still get back RM1.25 billion cash.

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