A Way Out For MAS

How many times, how much longer should we keep bailing MAS? How much have we spent... RM26bn!!! If you take from year 2000, that is more than RM1bn a year to keep this thing afloat.

We see a figure like RM26bn and it does not make much impact because we have no frame of reference. What is RM26bn? 

Let's say the 1MDB, which was a financial crime and CBT, cost us Malaysians RM5bn. Then MAS would have meant going through about 5x 1MDB disaster. To be fair, MAS is a business and while the comparison is not entirely apples vs apples, there is still some painful truth in comparing it to 1MDB.

a) There is no shame in not having a national airline but there is a lot of shame and fiscal irresponsibility when we keep losing more than RM1bn a year for the past 20 years.

b) It doesn't take a rocket scientist to see that MAS is almost unfixable owing to the: i) the union and their contracts (back in 2015 20,000 employees were terminated and 14,000 rehired, were the terms too generous our is it the culture which still infects the company?); ii) the legacy of bloated supply contracts and the greedy gatekeepers and their leakages; iii) the overcrowding for short haul flights; iv) having depleted so many international routes, MAS is having difficulty branding itself properly other than a codeshare specialist.

Since we are going to lose more than RM1bn a year, just sit down with the unions and supply chain contractors - declare bankruptcy and negoatiate to tear up all contracts at a steep discount or haircut resolution. While I am all for good unions and employee rights, somewhere along the way the MAS union has gone past what is good for the company - be honest.

Value all existing planes and landing rights, come up with a figure. Sell to AirAsiaX for shares, but golden share remains with current AirAsiaX management for 10 years.

Inject into AirAsiaX as that would be more palatable for Tony and his team. At least the better margins at AirAsia stays intact. All domestic routes to be integrated and managed by AirAsia. We cut out the duplicity and may even be able to fly more secondary support routes (such as twice a week Ipoh-Bangkok, Ipoh-KK,etc..).

As for ex-MAS employees, after getting their severance, those who are interested will need to re-apply to AirAsiaX to be integrated as AirAsia employees. This part will be critical because you don't want an us-them situation camp fight if you were to absorb all staff automatically from MAS. Pick and choose those who will conform.

By selling to AirAsiaX, MOF will keep a healthy stake to hopefully plow back some profits to compensate for the losses to the people. Secondly, it would not be 'nice" to sell MAS to a foreign party, only to see them turnaround the thing. 

20 years and multiple CEOs have shown and proven that MAS is not fixable because we "allowed" it to be unmanageable, hence the best professional will also not be able to do much - its like asking a chess Grandmaster to play for your country but he/she can only move your rook two spots and your bishops once every 10 moves, etc... it is ridiculous.

Bite the bullet and move on already. Forget about the votes of the employees and relatives, that's not the way to manage a country properly.

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